Is Now The Time To Look At Buying New Wave Group AB (publ) (STO:NEWA B)?

New Wave Group AB (publ) (STO:NEWA B), is not the largest company out there, but it received a lot of attention from a substantial price increase on the OM over the last few months. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, 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 New Wave Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for New Wave Group

Is New Wave Group Still Cheap?

Good news, investors! New Wave Group is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is SEK188.12, but it is currently trading at kr126 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because New Wave Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of New Wave Group look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 32% over the next couple of years, the future seems bright for New Wave 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? Since NEWA B is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on NEWA B for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NEWA B. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you want to dive deeper into New Wave Group, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with New Wave Group, and understanding this should be part of your investment process.

If you are no longer interested in New Wave 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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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.