Is Now An Opportune Moment To Examine Thule Group AB (publ) (STO:THULE)?

Thule Group AB (publ) (STO:THULE), might not be a large cap stock, but it saw significant share price movement during recent months on the OM, rising to highs of kr303 and falling to the lows of kr214. 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 Thule Group's current trading price of kr218 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 Thule Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Thule Group

Is Thule Group Still Cheap?

Good news, investors! Thule Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is SEK349.45, but it is currently trading at kr218 on the share market, meaning that there is still an opportunity to buy now. However, given that Thule Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Thule Group generate?

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. Though in the case of Thule Group, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although THULE is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to THULE, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on THULE for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing Thule Group at this point in time. Every company has risks, and we've spotted 3 warning signs for Thule Group (of which 2 are a bit concerning!) you should know about.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.