Sany Heavy Equipment International Holdings Company Limited (HKG:631), is not the largest company out there, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$8.55 and falling to the lows of HK$7.09. 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 Sany Heavy Equipment International Holdings' current trading price of HK$7.63 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 Sany Heavy Equipment International Holdings's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Sany Heavy Equipment International Holdings

Is Sany Heavy Equipment International Holdings still cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 15.08x is currently trading slightly above its industry peers' ratio of 10.7x, which means if you buy Sany Heavy Equipment International Holdings today, you'd be paying a relatively sensible price for it. And if you believe that Sany Heavy Equipment International Holdings should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, it seems like Sany Heavy Equipment International Holdings's share price is quite stable, which means there may be less chances to buy low in the future now that it's priced similarly to industry peers. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Sany Heavy Equipment International Holdings?

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 profit expected to grow by 52% over the next couple of years, the future seems bright for Sany Heavy Equipment International Holdings. 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 already priced in 631's positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at 631? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you've been keeping tabs on 631, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for 631, which means it's worth diving deeper into other factors such as the strength of its balance sheet, 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 Sany Heavy Equipment International Holdings at this point in time. At Simply Wall St, we found 1 warning sign for Sany Heavy Equipment International Holdings and we think they deserve your attention.

If you are no longer interested in Sany Heavy Equipment International Holdings, 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.