At US$262, Is It Time To Put Littelfuse, Inc. (NASDAQ:LFUS) On Your Watch List?

While Littelfuse, Inc. (NASDAQ:LFUS) might not have the largest market cap around , it saw a decent share price growth of 16% on the NASDAQGS over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Littelfuse’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Littelfuse

Is Littelfuse Still Cheap?

The stock is currently trading at US$262 on the share market, which means it is overvalued by 37% compared to our intrinsic value of $191.77. This means that the opportunity to buy Littelfuse at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Littelfuse’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 kind of growth will Littelfuse 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. Littelfuse's earnings over the next few years are expected to increase by 56%, 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? LFUS’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe LFUS 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 an eye on LFUS for a while, 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 positive outlook is encouraging for LFUS, 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 Littelfuse, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with Littelfuse, and understanding these should be part of your investment process.

If you are no longer interested in Littelfuse, 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.