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XRF Scientific Limited (ASX:XRF), might not be a large cap stock, but it saw a significant share price rise of 25% in the past couple of months on the ASX. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine XRF Scientific’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for XRF Scientific
Is XRF Scientific Still Cheap?
Good news, investors! XRF Scientific is still a bargain right now. According to our valuation, the intrinsic value for the stock is A$1.65, but it is currently trading at AU$1.28 on the share market, meaning that there is still an opportunity to buy now. XRF Scientific’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of XRF Scientific look like?
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. 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. XRF Scientific's earnings over the next few years are expected to increase by 23%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since XRF is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on XRF for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy XRF. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.