Let's talk about the popular Sociedad Química y Minera de Chile S.A. (NYSE:SQM). The company's shares received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Sociedad Química y Minera de Chile’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Sociedad Química y Minera de Chile

What is Sociedad Química y Minera de Chile worth?

According to my valuation model, Sociedad Química y Minera de Chile seems to be fairly priced at around 7.46% above my intrinsic value, which means if you buy Sociedad Química y Minera de Chile today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $50.11, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Sociedad Química y Minera de Chile’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Sociedad Química y Minera de Chile 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. 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. With profit expected to more than double over the next couple of years, the future seems bright for Sociedad Química y Minera de Chile. 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? It seems like the market has already priced in SQM’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on SQM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for Sociedad Química y Minera de Chile you should be aware of.

If you are no longer interested in Sociedad Química y Minera de Chile, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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