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Adecco Group AG (VTX:ADEN), which is in the professional services business, and is based in Switzerland, led the SWX gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Adecco Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Adecco Group
Is Adecco Group still cheap?
Good news, investors! Adecco Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CHF91.06, but it is currently trading at CHF55.40 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Adecco Group’s share price may be 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 kind of growth will Adecco Group generate?
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. Adecco Group’s earnings over the next few years are expected to increase by 54%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since ADEN 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ADEN for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ADEN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.