Let's talk about the popular LONGi Green Energy Technology Co., Ltd. (SHSE:601012). The company's shares received a lot of attention from a substantial price movement on the SHSE over the last few months, increasing to CN¥22.32 at one point, and dropping to the lows of CN¥18.17. 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 LONGi Green Energy Technology's current trading price of CN¥18.20 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at LONGi Green Energy Technology's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is LONGi Green Energy Technology Worth?
The stock seems fairly valued at the moment according to our valuation model. It's trading around 7.4% below our intrinsic value, which means if you buy LONGi Green Energy Technology today, you'd be paying a reasonable price for it. And if you believe the company's true value is CN¥19.65, then there isn't much room for the share price grow beyond what it's currently trading. In addition to this, LONGi Green Energy Technology has a low beta, which suggests its share price is less volatile than the wider market.
Can we expect growth from LONGi Green Energy Technology?
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. LONGi Green Energy Technology's 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? It seems like the market has already priced in 601012's positive outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you've been keeping tabs on 601012, 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.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To that end, you should learn about the 3 warning signs we've spotted with LONGi Green Energy Technology (including 1 which makes us a bit uncomfortable).
If you are no longer interested in LONGi Green Energy Technology, 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.