At kr170, Is Sweco AB (publ) (STO:SWEC B) Worth Looking At Closely?

While Sweco AB (publ) (STO:SWEC B) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the OM. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Sweco’s outlook and valuation to see if the opportunity still exists.

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What's The Opportunity In Sweco?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.1% below our intrinsic value, which means if you buy Sweco today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth SEK185.31, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Sweco’s share price may be more stable over time (relative to the market), as indicated by its low beta.

See our latest analysis for Sweco

Can we expect growth from Sweco?

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. With profit expected to grow by 28% over the next couple of years, the future seems bright for Sweco. 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? SWEC 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 SWEC B, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. In terms of investment risks, we've identified 1 warning sign with Sweco, and understanding this should be part of your investment process.

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.