Kingdee International Software Group Company Limited (HKG:268), is not the largest company out there, but it received a lot of attention from a substantial price increase on the SEHK over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Kingdee International Software Group's outlook and valuation to see if the opportunity still exists.

What's The Opportunity In Kingdee International Software Group?

According to our valuation model, Kingdee International Software Group seems to be fairly priced at around 9.2% below our intrinsic value, which means if you buy Kingdee International Software Group today, you'd be paying a fair price for it. And if you believe the company's true value is HK$9.72, then there's not much of an upside to gain from mispricing. What's more, Kingdee International Software Group's share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Kingdee International Software Group?

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 79% over the next year, the near-term future seems bright for Kingdee International Software Group. 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? 268'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 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 268, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

So while earnings quality is important, it's equally important to consider the risks facing Kingdee International Software Group at this point in time. Case in point: We've spotted 1 warning sign for Kingdee International Software Group you should be aware of.

If you are no longer interested in Kingdee International Software Group, 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.