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Helios Technologies (NYSE:HLIO) shares climbed higher after the company saw increased demand from its industrial and health & wellness segments. This growth was fueled by strong sales of its quick-release coupling products and effective cost discipline.

See our latest analysis for Helios Technologies.

Helios Technologies’ share price has rebounded over the past quarter, delivering a notable 46% gain in the last 90 days as investors responded to the company’s operational improvements and upbeat outlook. Despite some recent volatility, the 1-year total shareholder return of 8.9% points to a stock that appears to be regaining momentum as its end markets strengthen.

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But with shares having soared recently, the key question is whether Helios Technologies still offers value at current levels or if the market has fully priced in its anticipated growth, which could leave would-be buyers on the sidelines.

The narrative’s fair value of $60.60 is higher than Helios Technologies’ last close at $52.98, suggesting room for further upside if analyst assumptions play out. The price target reflects expectations that operational improvements and industry megatrends could lift earnings and margins in the years ahead.

The shift in the industry towards electrification of mobile and industrial equipment is driving OEM demand for sophisticated electro-hydraulic and electronic control solutions. Helios is actively innovating in these areas, for example with Enovation Controls and Cygnus Reach, which supports both top-line growth and margin expansion over the medium to long term.

Read the complete narrative.

Curious about which future profit levers and bold margin goals underpin this premium fair value? The narrative’s assumptions involve ambitious improvements you might not expect for an industrial firm. Uncover the details that analysts believe could send shares even higher.

Result: Fair Value of $60.60 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, risks remain if the market shifts away from traditional hydraulics or if Helios struggles to offset ongoing end-market volatility through innovation and diversification.

Find out about the key risks to this Helios Technologies narrative.

While the narrative suggests room for upside, a closer look at Helios Technologies’ price-to-earnings ratio raises questions. Shares currently trade at 50.3 times earnings, much higher than US Machinery industry peers at 24.2x and also above the fair ratio of 41.3x. This may indicate the market is already pricing in significant future growth. Does this premium leave little margin for error if expectations fall short?

See what the numbers say about this price — find out in our valuation breakdown.

If you see things differently or want to dive into the data on your own terms, you can craft a custom perspective in just minutes. Do it your way.

A great starting point for your Helios Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

Companies discussed in this article include HLIO.

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