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EVS Broadcast Equipment SA. (ENXTBR:EVS), a communications company based in Belgium, received a lot of attention from a substantial price movement on the ENXTBR over the last few months, increasing to €29.4 at one point, and dropping to the lows of €22.75. 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 EVS Broadcast Equipment’s current trading price of €22.75 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at EVS Broadcast Equipment’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for EVS Broadcast Equipment
What’s the opportunity in EVS Broadcast Equipment?
Great news for investors – EVS Broadcast Equipment is still trading at a fairly cheap price. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.87x is currently well-below the industry average of 25.61x, meaning that it is trading at a cheaper price relative to its peers. Another thing to keep in mind is that EVS Broadcast Equipment’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.
What does the future of EVS Broadcast Equipment look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 52.73% over the next year, the near-term future seems bright for EVS Broadcast Equipment. 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? Since EVS is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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.