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Today we're going to take a look at the well-established Infineon Technologies AG (ETR:IFX). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the XTRA. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Infineon Technologies’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Infineon Technologies
What Is Infineon Technologies Worth?
According to our valuation model, Infineon Technologies seems to be fairly priced at around 9.84% above our intrinsic value, which means if you buy Infineon Technologies today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €31.65, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Infineon Technologies’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Infineon Technologies look like?
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 Infineon Technologies. 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 already priced in IFX’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?