Is 24SevenOffice Scandinavia AB (publ) (NGM:247) Potentially Undervalued?

While 24SevenOffice Scandinavia AB (publ) (NGM:247) might not be the most widely known stock at the moment, it led the NGM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine 24SevenOffice Scandinavia’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for 24SevenOffice Scandinavia

What is 24SevenOffice Scandinavia worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14.88% above my intrinsic value, which means if you buy 24SevenOffice Scandinavia today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth SEK39.26, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since 24SevenOffice Scandinavia’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 24SevenOffice Scandinavia?

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. In 24SevenOffice Scandinavia's case, its revenues over the next few years are expected to grow by 51%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? 247’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 247, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining 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 24SevenOffice Scandinavia at this point in time. You'd be interested to know, that we found 2 warning signs for 24SevenOffice Scandinavia and you'll want to know about these.

If you are no longer interested in 24SevenOffice Scandinavia, 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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