Yahoo Finance What’s Installed For Kitron ASA (OB:KIT)?
Kitron ASA (OB:KIT), is a ØRE1.79B small-cap, which operates in the tech hardware industry based in Norway. Innovations such as augmented reality, machine learning and autonomous vehicles are paving the way for tech sector growth. Tech analysts are forecasting for the entire hardware tech industry, a strong double-digit growth of 18.27% in the upcoming year , and a whopping growth of 49.82% over the next couple of years. However this rate still came in below the growth rate of the NO stock market as a whole. Today, I will analyse the industry outlook, as well as evaluate whether Kitron is lagging or leading in the industry. View our latest analysis for Kitron
What’s the catalyst for Kitron’s sector growth?
Despite all the opportunities, tech companies still face a host of challenges, including coping with an increasingly burdensome global regulation. Since the regulatory environment is unlikely to become less complex, organizations will need to address the constantly evolving rules for governing privacy, security and handling of data, as well as cybersecurity issues. In the past year, the industry delivered negative growth of -30.32%, underperforming the NO market growth of 7.60%. Kitron leads the pack with its impressive earnings growth of 21.59% over the past year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 15.95% compared to the wider tech hardware sector growth hovering in the teens next year.
Is Kitron and the sector relatively cheap?
The tech hardware sector’s PE is currently hovering around 20.13x, higher than the rest of the NO stock market PE of 13.14x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry returned a similar 11.24% on equities compared to the market’s 10.34%. On the stock-level, Kitron is trading at a PE ratio of 17.18x, which is relatively in-line with the average tech stock. In terms of returns, Kitron generated 15.07% in the past year, which is 3.84% over the tech sector.
Next Steps:
If Kitron has been on your watchlist for a while, now may not be the best time to enter into the stock. The company is an tech industry laggard in terms of its future growth outlook, and is trading relatively in-line with its peers. If growth and mispricing are important aspects for your investment thesis, there may be better investments in the tech sector. However, before you make a decision on the stock, I suggest you look at Kitron’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has KIT’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kitron? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
