In This Article:
Today we’re going to take a look at the well-established Thales SA. (ENXTPA:HO). The company’s stock saw a significant share price rise of over 20% in the past couple of months on the ENXTPA. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Thales’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Thales
What’s the opportunity in Thales?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15% above my intrinsic value, which means if you buy Thales today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €94.78, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like Thales’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Thales?
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. Thales’s earnings over the next few years are expected to increase by 74.61%, 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? HO’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on HO, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.