Vectron Systems AG (ETR:V3S), is not the largest company out there, but it received a lot of attention from a substantial price increase on the XTRA over the last few months. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Vectron Systems’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Vectron Systems
What's The Opportunity In Vectron Systems?
Good news, investors! Vectron Systems is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is €15.47, but it is currently trading at €10.50 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Vectron Systems’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Vectron Systems 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 revenues expected to grow by 42% over the next couple of years, the future seems bright for Vectron Systems. If the level of expenses is able to be maintained, 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 V3S is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on V3S for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy V3S. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.