Is Now The Time To Look At Buying Lagercrantz Group AB (publ) (STO:LAGR B)?

Lagercrantz Group AB (publ) (STO:LAGR B), is not the largest company out there, but it led the OM gainers with a relatively large price hike in the past couple of weeks. The recent share price gains has brought the company back closer to its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Lagercrantz Group’s outlook and valuation to see if the opportunity still exists.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Is Lagercrantz Group Still Cheap?

The stock is currently trading at kr231 on the share market, which means it is overvalued by 23% compared to our intrinsic value of SEK188.34. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Lagercrantz Group’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

See our latest analysis for Lagercrantz Group

Can we expect growth from Lagercrantz Group?

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. Lagercrantz Group's earnings over the next few years are expected to increase by 65%, 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? It seems like the market has well and truly priced in LAGR B’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe LAGR B should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on LAGR B for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for LAGR B, which means 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 Lagercrantz Group, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for Lagercrantz Group you should know about.

If you are no longer interested in Lagercrantz Group, 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.