Is Now An Opportune Moment To Examine NCC AB (publ) (STO:NCC B)?

NCC AB (publ) (STO:NCC B), is not the largest company out there, but it saw a decent share price growth of 20% on the OM over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at NCC’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for NCC

Is NCC Still Cheap?

NCC appears to be overvalued by 21% at the moment, based on our discounted cash flow valuation. The stock is currently priced at kr162 on the market compared to our intrinsic value of SEK133.94. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since NCC’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from NCC?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 0.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for NCC, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in NCC B’s future outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe NCC B should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on NCC B for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that NCC has 4 warning signs and it would be unwise to ignore them.

If you are no longer interested in NCC, 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.