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XRF Scientific Limited (ASX:XRF), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the ASX. The recent share price gains has brought the company back closer to its yearly peak. Less-covered, small caps sees 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 take a look at XRF Scientific’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for XRF Scientific
Is XRF Scientific Still Cheap?
Good news, investors! XRF Scientific is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is A$1.97, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. 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?
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 29% over the next couple of years, the future seems bright for XRF Scientific. 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? Since XRF is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 enter the stock. Its buoyant 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 track record of its management team, in order to make a well-informed investment decision.