At kr128, Is It Time To Put SkiStar AB (publ) (STO:SKIS B) On Your Watch List?

While SkiStar AB (publ) (STO:SKIS B) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the OM. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at SkiStar’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for SkiStar

Is SkiStar Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.0% below my intrinsic value, which means if you buy SkiStar today, you’d be paying a reasonable price for it. And if you believe the company’s true value is SEK130.56, then there’s not much of an upside to gain from mispricing. In addition to this, SkiStar has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of SkiStar look like?

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. Though in the case of SkiStar, it is expected to deliver a relatively unexciting earnings growth of 5.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in SKIS B’s future 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 tabs on SKIS B, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that SkiStar has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in SkiStar, 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.