Is It Time To Consider Buying Biotage AB (publ) (STO:BIOT)?

Biotage AB (publ) (STO:BIOT), is not the largest company out there, but it saw significant share price movement during recent months on the OM, rising to highs of kr275 and falling to the lows of kr157. 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 Biotage's current trading price of kr171 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 Biotage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Biotage

Is Biotage still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.1% below my intrinsic value, which means if you buy Biotage today, you’d be paying a reasonable price for it. And if you believe the company’s true value is SEK182.41, then there’s not much of an upside to gain from mispricing. Furthermore, Biotage’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Biotage?

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. With profit expected to grow by 57% over the next couple of years, the future seems bright for Biotage. 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? It seems like the market has already priced in BIOT’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on BIOT, 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 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.

So while earnings quality is important, it's equally important to consider the risks facing Biotage at this point in time. At Simply Wall St, we found 1 warning sign for Biotage and we think they deserve your attention.

If you are no longer interested in Biotage, 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.