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Amadeus FiRe AG (ETR:AAD), is not the largest company out there, but it saw significant share price movement during recent months on the XTRA, rising to highs of €94.40 and falling to the lows of €75.20. 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 Amadeus FiRe's current trading price of €76.00 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 Amadeus FiRe’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 Amadeus FiRe
What's The Opportunity In Amadeus FiRe?
Good news, investors! Amadeus FiRe is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. 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 Amadeus FiRe’s ratio of 11.83x is below its peer average of 18.5x, which indicates the stock is trading at a lower price compared to the Professional Services industry. However, given that Amadeus FiRe’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Amadeus FiRe look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 14% over the next couple of years, the outlook is positive for Amadeus FiRe. 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 AAD is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic 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.