Is AddLife AB (publ) (STO:ALIF B) Potentially Undervalued?

While AddLife AB (publ) (STO:ALIF B) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the OM. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a kr23b market cap stock, it seems odd AddLife is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today we will analyse the most recent data on AddLife’s outlook and valuation to see if the opportunity still exists.

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Is AddLife Still Cheap?

According to our valuation model, AddLife seems to be fairly priced at around 10.07% above our intrinsic value, which means if you buy AddLife today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is SEK168.99, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since AddLife’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.

Check out our latest analysis for AddLife

Can we expect growth from AddLife?

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. AddLife's earnings over the next few years are expected to increase by 65%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in ALIF 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on ALIF 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about AddLife as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with AddLife, and understanding it should be part of your investment process.

If you are no longer interested in AddLife, 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.