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Smartbroker Holding AG (ETR:SB1), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €7.34 at one point, and dropping to the lows of €5.70. 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 Smartbroker Holding's current trading price of €5.70 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 Smartbroker Holding’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Smartbroker Holding
What Is Smartbroker Holding Worth?
Smartbroker Holding appears to be overvalued by 34% at the moment, based on our discounted cash flow valuation. The stock is currently priced at €5.70 on the market compared to our intrinsic value of €4.25. This means that the opportunity to buy Smartbroker Holding at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Smartbroker Holding’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.
Can we expect growth from Smartbroker Holding?
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. 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. Smartbroker Holding's earnings over the next few years are expected to increase by 81%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? SB1’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe SB1 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.