While AAC Technologies Holdings Inc. (HKG:2018) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$18.92 at one point, and dropping to the lows of HK$13.26. 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 AAC Technologies Holdings' current trading price of HK$13.26 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 AAC Technologies 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 AAC Technologies Holdings
What Is AAC Technologies Holdings Worth?
According to my valuation model, AAC Technologies Holdings seems to be fairly priced at around 6.0% below my intrinsic value, which means if you buy AAC Technologies Holdings today, you'd be paying a fair price for it. And if you believe the company's true value is HK$14.11, then there's not much of an upside to gain from mispricing. What's more, AAC Technologies Holdings's share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will AAC Technologies Holdings generate?SEHK:2018 Earnings and Revenue Growth September 22nd 2022
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. AAC Technologies Holdings' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? 2018's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you've been keeping an eye on 2018, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Case in point: We've spotted 1 warning sign for AAC Technologies Holdings you should be aware of.
If you are no longer interested in AAC Technologies Holdings, 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.