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Stabilus S.A. (FRA:STM), which is in the machinery business, and is based in Luxembourg, saw significant share price movement during recent months on the DB, rising to highs of €52.5 and falling to the lows of €36.86. 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 Stabilus's current trading price of €38.68 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 Stabilus’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 Stabilus
Is Stabilus still cheap?
Great news for investors – Stabilus is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €71.92, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Stabilus’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Stabilus look like?
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 a double-digit 16% over the next couple of years, the outlook is positive for Stabilus. 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 STM is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 undervaluation.
Are you a potential investor? If you’ve been keeping an eye on STM for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy STM. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.