Rhön-Klinikum Aktiengesellschaft (DB:RHK), a healthcare company based in Germany, saw significant share price volatility over the past couple of months on the DB, rising to the highs of €31.78 and falling to the lows of €27.4. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Rhön-Klinikum’s current trading price of €27.58 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Rhön-Klinikum’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Rhön-Klinikum

What’s the opportunity in Rhön-Klinikum?

The stock is currently trading at €27.58 on the share market, which means it is overvalued by 76% compared to my intrinsic value of €15.67. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that Rhön-Klinikum’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from Rhön-Klinikum?

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 more than double over the next couple of years, the future seems bright for Rhön-Klinikum. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? RHK’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe RHK should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on RHK for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for RHK, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.