SciBase Holding AB (publ) (STO:SCIB), a medical equipment company based in Sweden, received a lot of attention from a substantial price movement on the OM over the last few months, increasing to SEK8.4 at one point, and dropping to the lows of SEK6.5. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether SciBase Holding’s current trading price of SEK6.75 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 SciBase Holding’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for SciBase Holding
What’s the opportunity in SciBase Holding?The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that SciBase Holding’s ratio of 1.06x is trading slightly below its industry peers’ ratio of 2.74x, which means if you buy SciBase Holding today, you’d be paying a relatively reasonable price for it. And if you believe SciBase Holding should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, SciBase Holding’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What kind of growth will SciBase Holding generate?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 24.93% over the next couple of years, the future seems bright for SciBase Holding. It looks like higher cash flows 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 SCIB’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 financial strength of the company. Have these factors changed since the last time you looked at SCIB? 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 SCIB, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for SCIB, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on SciBase Holding. You can find everything you need to know about SciBase Holding in the latest infographic research report. If you are no longer interested in SciBase Holding, you can use our free platform to see my list of over 50 other stocks with a high growth potential.