Should You Think About Buying Castellum AB (publ) (STO:CAST) Now?

While Castellum AB (publ) (STO:CAST) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the OM, rising to highs of kr178 and falling to the lows of kr113. 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 Castellum's current trading price of kr120 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 Castellum’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out the opportunities and risks within the SE Real Estate industry.

Is Castellum Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.18% above my intrinsic value, which means if you buy Castellum today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is SEK112.68, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Castellum’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Castellum 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. Though in the case of Castellum, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, CAST appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on CAST for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on CAST should the price fluctuate below its true value.

If you want to dive deeper into Castellum, you'd also look into what risks it is currently facing. When we did our research, we found 4 warning signs for Castellum (2 are potentially serious!) that we believe deserve your full attention.

If you are no longer interested in Castellum, 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.