Is Now An Opportune Moment To Examine FGI Industries Ltd. (NASDAQ:FGI)?

While FGI Industries Ltd. (NASDAQ:FGI) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the NASDAQCM over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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 FGI Industries’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for FGI Industries

What's The Opportunity In FGI Industries?

Great news for investors – FGI Industries is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $1.20, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that FGI Industries’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of FGI Industries 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. Though in the case of FGI Industries, it is expected to deliver a relatively unexciting top-line growth of 3.8% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since FGI is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FGI for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FGI. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you want to dive deeper into FGI Industries, you'd also look into what risks it is currently facing. Our analysis shows 5 warning signs for FGI Industries (3 are concerning!) and we strongly recommend you look at these before investing.

If you are no longer interested in FGI Industries, 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.