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Cherry SE (ETR:C3RY), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the XTRA over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Cherry’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Cherry
What Is Cherry Worth?
According to our valuation model, Cherry seems to be fairly priced at around 10.67% above our intrinsic value, which means if you buy Cherry today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €2.28, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Cherry’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.
Can we expect growth from Cherry?
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. With profit expected to grow by 99% over the next year, the near-term future seems bright for Cherry. 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? It seems like the market has already priced in C3RY’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 C3RY, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.