Is There Now An Opportunity In Shandong Linuo Technical Glass Co.,Ltd. (SZSE:301188)?

Shandong Linuo Technical Glass Co.,Ltd. (SZSE:301188), is not the largest company out there, but it saw a significant share price rise of 23% in the past couple of months on the SZSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Shandong Linuo Technical GlassLtd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Shandong Linuo Technical GlassLtd

Is Shandong Linuo Technical GlassLtd Still Cheap?

Shandong Linuo Technical GlassLtd appears to be expensive according to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. We’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 40.08x is currently well-above the industry average of 26.4x, meaning that it is trading at a more expensive price relative to its peers. Another thing to keep in mind is that Shandong Linuo Technical GlassLtd’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards the levels of its industry peers over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard for it to fall back down into an attractive buying range again.

What kind of growth will Shandong Linuo Technical GlassLtd generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Shandong Linuo Technical GlassLtd'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 well and truly priced in 301188’s positive outlook, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe 301188 should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on 301188 for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for 301188, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Shandong Linuo Technical GlassLtd, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Shandong Linuo Technical GlassLtd you should know about.

If you are no longer interested in Shandong Linuo Technical GlassLtd, 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.