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Deutsche EuroShop AG (ETR:DEQ), 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 €22.10 at one point, and dropping to the lows of €18.06. 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 Deutsche EuroShop's current trading price of €18.98 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 Deutsche EuroShop’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 Deutsche EuroShop
What Is Deutsche EuroShop Worth?
According to our valuation model, Deutsche EuroShop seems to be fairly priced at around 10.68% above our intrinsic value, which means if you buy Deutsche EuroShop today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €17.15, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Deutsche EuroShop’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Deutsche EuroShop?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Deutsche EuroShop, it is expected to deliver a negative revenue growth of -1.0% over the next couple of years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? DEQ seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.