Should You Investigate DistIT AB (publ) (STO:DIST) At kr11.14?

While DistIT AB (publ) (STO:DIST) 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 kr37.40 at one point, and dropping to the lows of kr10.26. 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 DistIT's current trading price of kr11.14 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 DistIT’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 DistIT

What Is DistIT Worth?

According to my valuation model, DistIT seems to be fairly priced at around 11.37% above my intrinsic value, which means if you buy DistIT today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth SEK10.00, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, DistIT’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will DistIT generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. In DistIT's case, its revenues over the next few years are expected to grow by 37%, 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? DIST’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on DIST, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you'd like to know more about DistIT as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for DistIT (2 shouldn't be ignored!) and we strongly recommend you look at them before investing.

If you are no longer interested in DistIT, 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.