When Should You Buy Christian Berner Tech Trade AB (publ) (STO:CBTT B)?

While Christian Berner Tech Trade AB (publ) (STO:CBTT B) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the OM. 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 Christian Berner Tech Trade’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Christian Berner Tech Trade

Is Christian Berner Tech Trade Still Cheap?

According to my 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, 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 Christian Berner Tech Trade’s ratio of 14.47x is trading in-line with its industry peers’ ratio, which means if you buy Christian Berner Tech Trade today, you’d be paying a relatively reasonable price for it. Is there another opportunity to buy low in the future? Since Christian Berner Tech Trade’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.

What does the future of Christian Berner Tech Trade 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. 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. Christian Berner Tech Trade's earnings over the next few years are expected to increase by 52%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? CBTT B’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 CBTT B? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on CBTT B, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for CBTT B, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Case in point: We've spotted 3 warning signs for Christian Berner Tech Trade you should be aware of.

If you are no longer interested in Christian Berner Tech Trade, 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.