Should You Think About Buying Platzer Fastigheter Holding AB (publ) (STO:PLAZ B) Now?

Platzer Fastigheter Holding AB (publ) (STO:PLAZ B), is not the largest company out there, but it received a lot of attention from a substantial price increase on the OM over the last few months. As a kr18b market-cap stock, it seems odd Platzer Fastigheter Holding is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Platzer Fastigheter Holding’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Platzer Fastigheter Holding

Is Platzer Fastigheter Holding still cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 11.33x is currently trading slightly above its industry peers’ ratio of 11.3x, which means if you buy Platzer Fastigheter Holding today, you’d be paying a relatively sensible price for it. And if you believe Platzer Fastigheter Holding should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since Platzer Fastigheter Holding’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

Can we expect growth from Platzer Fastigheter Holding?

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. However, with a relatively muted profit growth of 4.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Platzer Fastigheter Holding, at least in the short term.

What this means for you:

Are you a shareholder? It seems like the market has already priced in PLAZ B’s growth outlook, 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 PLAZ B? 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 an eye on PLAZ B, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean 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 Platzer Fastigheter Holding, you'd also look into what risks it is currently facing. When we did our research, we found 5 warning signs for Platzer Fastigheter Holding (2 make us uncomfortable!) that we believe deserve your full attention.

If you are no longer interested in Platzer Fastigheter Holding, 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. 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.
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