At kr161, Is It Time To Put Sweco AB (publ) (STO:SWEC B) On Your Watch List?

Sweco AB (publ) (STO:SWEC B), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the OM over the last few months, increasing to kr191 at one point, and dropping to the lows of kr157. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Sweco's current trading price of kr161 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sweco’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is Sweco Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 5.5% below our intrinsic value, which means if you buy Sweco today, you’d be paying a fair price for it. And if you believe the company’s true value is SEK170.30, then there’s not much of an upside to gain from mispricing. In addition to this, Sweco has a low beta, which suggests its share price is less volatile than the wider market.

Check out our latest analysis for Sweco

Can we expect growth from Sweco?

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. Sweco's earnings over the next few years are expected to increase by 22%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in SWEC B’s positive outlook, 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 an eye on SWEC 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.

So while earnings quality is important, it's equally important to consider the risks facing Sweco at this point in time. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Sweco.

If you are no longer interested in Sweco, 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.