At kr378, Is BTS Group AB (publ) (STO:BTS B) Worth Looking At Closely?

By
Simply Wall St
Published
January 10, 2022
OM:BTS B
Source: Shutterstock

BTS Group AB (publ) (STO:BTS B), is not the largest company out there, but it received a lot of attention from a substantial price movement on the OM over the last few months, increasing to kr432 at one point, and dropping to the lows of kr358. 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 BTS Group's current trading price of kr378 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at BTS Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for BTS Group

What is BTS Group worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.4% below my intrinsic value, which means if you buy BTS Group today, you’d be paying a fair price for it. And if you believe that the stock is really worth SEK387.47, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since BTS Group’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 BTS Group generate?

earnings-and-revenue-growth
OM:BTS B Earnings and Revenue Growth January 10th 2022

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. 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 27% over the next couple of years, the future seems bright for BTS Group. 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? It seems like the market has already priced in BTS 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 track record of its management team. 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 BTS 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for BTS Group you should be aware of.

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

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