Is It Too Late To Consider Buying Lifco AB (publ) (STO:LIFCO B)?

Lifco AB (publ) (STO:LIFCO B), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the OM. As a kr90b market cap stock, it seems odd Lifco is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Lifco’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Lifco

What is Lifco worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7.0% below my intrinsic value, which means if you buy Lifco today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth SEK213.32, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Lifco’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Lifco generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 12% over the next couple of years, the outlook is positive for Lifco. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? LIFCO B’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on LIFCO B, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Lifco, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Lifco has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Lifco, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.