Applus Services SA. (BME:APPS), a professional services company based in Spain, saw significant share price volatility over the past couple of months on the BME, rising to the highs of €11.95 and falling to the lows of €10.41. 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 Applus Services’s current trading price of €10.58 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 Applus Services’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Applus Services
What is Applus Services worth?
According to my valuation model, Applus Services seems to be fairly priced at around 3.14% below my intrinsic value, which means if you buy Applus Services today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €10.92, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Applus Services’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Applus Services?
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 grow by 95.53% over the next couple of years, the future seems bright for Applus Services. 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? APPS’s optimistic future growth appears to have been factored into the current share price, 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 confidence to invest in the company should the price drop below its fair value?