What does the Husqvarna AB (publ) (STO:HUSQ B) stock price indicate?
Although Husqvarna AB (publ) (STO:HUSQ B) may not be the best-known stock at the moment, it has garnered a lot of attention due to a substantial price move on OM in the over the past few months, rising to 92.04 kr at one point, and falling to a low of 68.70 kr. Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. A question to be answered is whether Husqvarna’s current trading price of 68.70 kr reflects the true value of the mid cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at Husqvarna’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest review for Husqvarna
What is the opportunity at Husqvarna?
Good news, investors! Husqvarna is still a good deal right now according to my multiple price model, which compares the company’s price-to-earnings ratio to the industry average. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find Husqvarna’s ratio of 10.22x to be below its average of 16.23x, indicating that the stock is trading at a lower price than the machinery industry. However, since Husqvarna’s share is quite volatile (meaning its price movements are amplified relative to the rest of the market), this could mean that the price may drop, giving us another chance to dip. to buy in the future. This is based on its high beta, which is a good indicator of stock price volatility.
What does the future of Husqvarna look like?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profits expected to grow by 11% in double digits over the next two years, the outlook is positive for Husqvarna. It seems that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What this means for you
Are you a shareholder? Given that HUSQ B is currently trading below the industry PE ratio, now may be the perfect time to accumulate more of your holdings in the stock. With an optimistic earnings outlook on the horizon, it appears that this growth has yet to be fully priced into the stock price. However, there are also other factors such as the capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on HUSQ B for a while, it might be time to get into the stock. Its thriving future earnings outlook is yet to be fully reflected in the current share price, which means it’s not too late to buy HUSQ B. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make an informed assessment.
If you want to dig deeper into Husqvarna, you should also look at the risks it currently faces. For example, we have identified 2 warning signs for Husqvarna (1 makes us a little uneasy) that you should know.
If you are no longer interested in Husqvarna, you can use our free platform to view our list of over 50 other stocks with high growth potential.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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