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Atria Oyj (HEL:ATRAV), which is in the food business, and is based in Finland, saw significant share price movement during recent months on the HLSE, rising to highs of €7.85 and falling to the lows of €6.95. 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 Atria Oyj's current trading price of €7.45 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 Atria Oyj’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 Atria Oyj
Is Atria Oyj still cheap?
According to my relative valuation model, the stock is currently overvalued. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Atria Oyj’s ratio of 22.19x is above its peer average of 16.38x, which suggests the stock is overvalued compared to the Food industry. But, is there another opportunity to buy low in the future? Since Atria Oyj’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 kind of growth will Atria Oyj generate?
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. Atria Oyj’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ATRAV’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe ATRAV 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.
Are you a potential investor? If you’ve been keeping tabs on ATRAV for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for ATRAV, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.