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While TKH Group N.V. (AMS:TWEKA) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the ENXTAM over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on TKH Group’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for TKH Group
What Is TKH Group Worth?
TKH Group appears to be overvalued by 22% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €44.74 on the market compared to my intrinsic value of €36.75. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that TKH Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from TKH Group?
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 grow by 41% over the next couple of years, the future seems bright for TKH Group. 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 well and truly priced in TWEKA’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe TWEKA 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 TWEKA 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 TWEKA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.