What Does Lagercrantz Group AB (publ)'s (STO:LAGR B) Share Price Indicate?

Lagercrantz Group AB (publ) (STO:LAGR B), might not be a large cap stock, but it saw significant share price movement during recent months on the OM, rising to highs of kr245 and falling to the lows of kr202. 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 Lagercrantz Group's current trading price of kr214 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lagercrantz Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In Lagercrantz Group?

According to our valuation model, the stock is currently overvalued by about 22%, trading at kr214 compared to our intrinsic value of SEK174.72. 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.

View our latest analysis for Lagercrantz Group

What does the future of Lagercrantz Group look like?

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. With profit expected to grow by 40% over the next couple of years, the future seems bright for Lagercrantz Group. 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? 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.

So while earnings quality is important, it's equally important to consider the risks facing Lagercrantz Group at this point in time. While conducting our analysis, we found that Lagercrantz Group has 1 warning sign and it would be unwise to ignore it.

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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.