Is It Time To Consider Buying Gasporox AB (publ) (STO:GPX)?

Gasporox AB (publ) (STO:GPX), is not the largest company out there, but 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 take a look at Gasporox’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Gasporox

What Is Gasporox Worth?

According to my valuation model, Gasporox seems to be fairly priced at around 9.72% above my intrinsic value, which means if you buy Gasporox today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth SEK9.75, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Gasporox’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Gasporox look like?

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. With revenues expected to grow by 71% over the next couple of years, the future seems bright for Gasporox. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? GPX’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 financial strength of the company. 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 GPX, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 4 warning signs for Gasporox you should be mindful of and 2 of them are potentially serious.

If you are no longer interested in Gasporox, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.