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Nynomic AG (ETR:M7U), is not the largest company out there, but it saw significant share price movement during recent months on the XTRA, rising to highs of €29.80 and falling to the lows of €21.90. 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 Nynomic's current trading price of €22.50 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 Nynomic’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 Nynomic
What's The Opportunity In Nynomic?
According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Nynomic’s ratio of 15.85x is trading slightly below its industry peers’ ratio of 15.85x, which means if you buy Nynomic today, you’d be paying a decent price for it. And if you believe Nynomic should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because Nynomic’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.
What does the future of Nynomic 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 28% over the next couple of years, the future seems bright for Nynomic. 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? M7U’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 M7U? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?