Is There An Opportunity With Arjo AB (publ)’s (STO:ARJO B) 48% Undervaluation?

Source: Shutterstock Key Insights Arjo’s estimated fair value is kr82.5 based on 2 Stage Free Cash Flow to Equity Current share price of kr42.6 suggests Arjo is 48% undervalued How far off is Arjo AB (publ) ( STO:ARJO B ) from its intrinsic value? Using the most recent financial data, we’ll take a look at whether the stock is fairly priced by taking the forecast future cash flows of the company and discounting them back to today’s value. Our analysis will employ the Discounted Cash Flow (DCF) model. Don’t get put off by the jargon, the math behind it is actually quite straightforward. Remember though, that there are many ways to estimate a company’s value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model . The Calculation We’re using the 2-stage growth model, which simply means we take in account two stages of company’s growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of […]

You may also like...