At kr100, Is Wihlborgs Fastigheter AB (publ) (STO:WIHL) Worth Looking At Closely?

Wihlborgs Fastigheter AB (publ) (STO:WIHL), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the OM. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Wihlborgs Fastigheter’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What's The Opportunity In Wihlborgs Fastigheter?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Wihlborgs Fastigheter’s ratio of 16.29x is trading slightly below its industry peers’ ratio of 20.27x, which means if you buy Wihlborgs Fastigheter today, you’d be paying a reasonable price for it. And if you believe Wihlborgs Fastigheter should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that Wihlborgs Fastigheter’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

See our latest analysis for Wihlborgs Fastigheter

What does the future of Wihlborgs Fastigheter 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. Wihlborgs Fastigheter's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? WIHL’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 WIHL? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on WIHL, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for WIHL, 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 Wihlborgs Fastigheter at this point in time. Be aware that Wihlborgs Fastigheter is showing 2 warning signs in our investment analysis and 1 of those is significant...

If you are no longer interested in Wihlborgs Fastigheter, 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.