In This Article:
- By GF Value
The stock of Materialise NV (NAS:MTLS, 30-year Financials) is estimated to be significantly overvalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $28.19 per share and the market cap of $1.5 billion, Materialise NV stock is believed to be significantly overvalued. GF Value for Materialise NV is shown in the chart below.
Because Materialise NV is significantly overvalued, the long-term return of its stock is likely to be much lower than its future business growth, which averaged 2.9% over the past five years.
Link: These companies may deliever higher future returns at reduced risk.
Investing in companies with poor financial strength has a higher risk of permanent loss of capital. Thus, it is important to carefully review the financial strength of a company before deciding whether to buy its stock. Looking at the cash-to-debt ratio and interest coverage is a great starting point for understanding the financial strength of a company. Materialise NV has a cash-to-debt ratio of 0.97, which is worse than 70% of the companies in Software industry. GuruFocus ranks the overall financial strength of Materialise NV at 5 out of 10, which indicates that the financial strength of Materialise NV is fair. This is the debt and cash of Materialise NV over the past years:
It poses less risk to invest in profitable companies, especially those that have demonstrated consistent profitability over the long term. A company with high profit margins is also typically a safer investment than one with low profit margins. Materialise NV has been profitable 5 over the past 10 years. Over the past twelve months, the company had a revenue of $200.3 million and loss of $0.189 a share. Its operating margin is -1.06%, which ranks in the middle range of the companies in Software industry. Overall, GuruFocus ranks the profitability of Materialise NV at 5 out of 10, which indicates fair profitability. This is the revenue and net income of Materialise NV over the past years: