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Leifheit Aktiengesellschaft (ETR:LEI), might not be a large cap stock, but it saw a decent share price growth of 15% on the XTRA over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Leifheit’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Leifheit
What Is Leifheit Worth?
Great news for investors – Leifheit is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is €22.57, but it is currently trading at €17.70 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Leifheit’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Leifheit?
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. Leifheit'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? Since LEI is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LEI for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LEI. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.