Should You Think About Buying Catena AB (publ) (STO:CATE) Now?

Catena AB (publ) (STO:CATE), might not be a large cap stock, but it saw significant share price movement during recent months on the OM, rising to highs of kr583 and falling to the lows of kr478. 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 Catena's current trading price of kr478 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 Catena’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 Catena

What Is Catena Worth?

Catena appears to be overvalued by 27% at the moment, based on our discounted cash flow valuation. The stock is currently priced at kr478 on the market compared to our intrinsic value of SEK374.60. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Catena’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

What kind of growth will Catena 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. However, with a relatively muted profit growth of 9.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Catena, at least in the short term.

What This Means For You

Are you a shareholder? CATE’s future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe CATE should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on CATE for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Catena, you'd also look into what risks it is currently facing. Be aware that Catena is showing 3 warning signs in our investment analysis and 1 of those can't be ignored...

If you are no longer interested in Catena, 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.