When Should You Buy H2O Innovation Inc. (TSE:HEO)?

Simply Wall St
·3 min read

H2O Innovation Inc. (TSE:HEO), might not be a large cap stock, but it led the TSX gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on H2O Innovation’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for H2O Innovation

Is H2O Innovation Still Cheap?

Good news, investors! H2O Innovation is still a bargain right now. According to my valuation, the intrinsic value for the stock is CA$3.29, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, H2O Innovation’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of H2O Innovation look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. With profit expected to grow by a double-digit 15% in the upcoming year, the short-term outlook is positive for H2O Innovation. 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 HEO is currently undervalued, it may be a great time to increase 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 HEO for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HEO. 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.

So while earnings quality is important, it's equally important to consider the risks facing H2O Innovation at this point in time. Be aware that H2O Innovation is showing 2 warning signs in our investment analysis and 1 of those is significant...

If you are no longer interested in H2O Innovation, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • Nvidia Sinks, Exposing 8 'Secrets' For When To Sell Stocks

    As top growth stocks like Nvidia fall below key moving averages, keep in mind these proven rules for when to sell stocks.

  • Forget Tesla. Top Funds Love This Non-Mag 7 AI Giant.

    As Tesla tanks, top funds bet big on AI leader Broadcom stock, as well as Nvidia and Google. But market pressures rise.

  • Stock market today: Tech stocks smoked, Nvidia tumbles 10% to cap worst week of the year

    A measure of calm was returning after Israel's retaliatory strike on Iran spooked the market and spurred a rush to safe havens such as gold.

  • Breaking: 2 juveniles, 3 adults shot in Greenbelt

    As many as five people who were part of a large gathering at a Greenbelt park were shot Friday afternoon, police said. Greenbelt police said at least 500 young adults were gathered in the Bowie area on "senior skip day" and were told to disperse. Much of the group moved to a park in the 6900 block of Hanover Parkway in Greenbelt. Police said officers were monitoring, but no illegal activity was going on before officers heard gunshots. Five people were shot, including two juveniles and three adults. Police said the adults may have been 18-year-olds.

  • Budget has 'bits and pieces' for the region: Melillo

    The 2024-25 federal budget is a plan to “unlock the door to the middle class for more Canadians – and renew the promise of our great country,” according to Finance Minister Chrystia Freeland. Kenora’s Conservative MP offered a different viewpoint Wednesday, saying the budget “keeps taxes high, builds bureaucracy instead of homes, and increases spending.” The budget that Freeland introduced in the House of Commons on Tuesday afternoon is “a classic NDP-Liberal budget,” Melillo said in a Zoom inte

  • Lululemon to shutter Washington distribution center, lay off 128 employees

    The Vancouver-based firm will shutter the Sumner distribution center as part of its business optimization effort and cut 128 jobs beginning June 21, according to a WARN notice filed with the state's Employment Security Department. The move comes at a time when Lululemon is seeing slowing demand for its premium athleisure in North America, where excessive inventory levels at sporting retailers has resulted in lower orders for sportswear and apparel firms. The lease for the company's 150,000-square-foot Sumner distribution center will end on July 2025, a regulatory filing showed.

  • US STOCKS-Nasdaq, S&P tumble as Netflix, chip stocks drag; AmEx boosts Dow

    The Nasdaq and the S&P 500 ended lower on Friday as Netflix shares weighed, but American Express kept the Dow afloat after quarterly earnings from both companies, while growing pessimism that the Federal Reserve would cut interest rates soon also dented sentiment. Netflix slumped as one of the bigger drags on the benchmark S&P index and Nasdaq after the video streaming company's second-quarter revenue view fell short of analysts' expectations while the company also unexpectedly said it would no longer provide subscriber counts.

  • 10 Luxury Goods That Are Cheaper at Sam’s Club

    Sam's Club is far more than a place to pick up giant boxes of cereal, snacks for the kids' lunches and a three-month supply of toilet paper, helping you save money by buying in bulk. Scattered...

  • Trump Era Tax Cuts Are Expiring: 4 Ways Your Household Budget Will Take a Hit

    Inflation has hit us hard and we've all felt the financial pinch. However, recently enacted tax laws and the expiration of existing rules will likely increase taxes. Learn More: This Is the One Type...

  • 11 Luxury Travel Accessories Rich People Always Buy

    For every luxurious travel item, there's a serviceable counterpart that will get the job done, but wealthy people often prefer the luxurious to the ordinary. Explore More: Dave Ramsey: 7 Vacation...

  • Corrections and clarifications

    Ryan Giggs | Ned Benson/Cate Shortland | Iditarod dog sled race

  • Many Wealthy People Own Second Homes — Why You Should Consider It, Too

    Having more than one home is now the norm for wealthy Americans. A 2023 Ameriprise Financial survey of financial advisors who work with high-net-worth clients estimated that about two out of three own...

  • Fed says 1,804 banks and other institutions tapped emergency lending facility

    Some 1,804 depository institutions tapped the emergency lending facility set up last March in the wake of Silicon Valley Bank's collapse, amounting to about 20% of all eligible firms, the Federal Reserve said on Friday. About 95% of the borrowers, which included banks, credit unions, savings associations, and branches and agencies of foreign banks, had less than $10 billion in assets, the U.S. central bank said in its semi-annual Financial Stability Report. The Bank Term Funding Program, as it was called, was aimed at addressing a liquidity crunch after a run on deposits led to the failures of SVB and Signature Bank and forced financial authorities to stage a rescue of the sector.

  • Coronation Street airs police trouble for Daniel as Nicky returns

    Coronation Street's Daniel Osbourne is facing new trouble with police after his secret meeting with ex-girlfriend Nicky Wheatley.

  • Fantasy Baseball Relief Pitcher Rundown: 8 key updates

    There has been some noteworthy movements in the fantasy baseball reliever landscape. Dalton Del Don breaks down the most important.

  • Leafs, Jets, Oilers and Canucks carry Canada's Cup hopes with drought at 30 years

    Josh Morrissey remembers the city coming to life before his eyes. A nine-year-old Flames fan in the spring of 2004, he was captivated by every Jarome Iginla chance and Miikka Kiprusoff save during Calgary's run to the Stanley Cup final. "It was just an awesome experience," said Morrissey, now a star defenceman for the Winnipeg Jets. "Living and dying on every win and loss." Hockey fans across Canada are once again preparing themselves to experience that annual thrill and torment. The Jets, Vanco

  • Met Police apologise for earlier apology about ‘openly Jewish’ comment

    Gideon Falter, chief executive of the Campaign Against Antisemitism, was wearing a kippah skull cap when he was stopped from crossing the road.

  • Biden administration restricts oil and gas leasing in 13 million acres of Alaska's petroleum reserve

    JUNEAU, Alaska (AP) — The Biden administration said Friday it will restrict new oil and gas leasing on 13 million acres (5.3 million hectares) of a federal petroleum reserve in Alaska to help protect wildlife such as caribou and polar bears as the Arctic continues to warm. The decision — part of a yearslong fight over whether and how to develop the vast oil resources in the state — finalizes protections first proposed last year as the Democratic administration prepared to approve the contentious

  • The best Amazon deals to shop this weekend: Save up to 90% on home appliances, gardening essentials and more

    A few of our faves? A Shark stick vac for just $100 and a vertical garden on sale for $34, plus sweet gift ideas for Mom.

  • People are forking out record $2,800 a month on average just to cover their mortgage payments

    The median monthly mortgage payment jumped 11% in the past year due to surging interest rates and soaring home prices.