Is There Now An Opportunity In Cibus Nordic Real Estate AB (publ) (STO:CIBUS)?

While Cibus Nordic Real Estate AB (publ) (STO:CIBUS) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the OM over the last few months, increasing to kr265 at one point, and dropping to the lows of kr194. 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 Cibus Nordic Real Estate's current trading price of kr205 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 Cibus Nordic Real Estate’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 Cibus Nordic Real Estate

Is Cibus Nordic Real Estate still cheap?

Cibus Nordic Real Estate appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Cibus Nordic Real Estate’s ratio of 12.66x is above its peer average of 5.08x, which suggests the stock is trading at a higher price compared to the Real Estate industry. Another thing to keep in mind is that Cibus Nordic Real Estate’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards the levels of its industry peers over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard for it to fall back down into an attractive buying range again.

What kind of growth will Cibus Nordic Real Estate generate?

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. Though in the case of Cibus Nordic Real Estate, it is expected to deliver a negative earnings growth of -11%, 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? If you believe CIBUS should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. 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 an eye on CIBUS for a while, now may not be the best time to enter into the stock. The price has climbed past its industry peers, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

So while earnings quality is important, it's equally important to consider the risks facing Cibus Nordic Real Estate at this point in time. For example, we've found that Cibus Nordic Real Estate has 6 warning signs (2 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Cibus Nordic Real Estate, 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.