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M1 Kliniken AG (ETR:M12), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €17.85 at one point, and dropping to the lows of €15.05. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether M1 Kliniken's current trading price of €15.25 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 M1 Kliniken’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 M1 Kliniken
What Is M1 Kliniken Worth?
Great news for investors – M1 Kliniken is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 16.89x is currently well-below the industry average of 22.08x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because M1 Kliniken’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from M1 Kliniken?
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 26% over the next couple of years, the future seems bright for M1 Kliniken. 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? Since M12 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive profit 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 price multiple.