Is It Too Late To Consider Buying The Platform Group AG (ETR:FSNT)?

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The Platform Group AG (ETR:FSNT), 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. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a small cap stock, which tends to lack high analyst coverage, 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 Platform Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Platform Group

Is Platform Group Still Cheap?

Great news for investors – Platform Group is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Platform Group’s ratio of 5.73x is below its peer average of 24.98x, which indicates the stock is trading at a lower price compared to the Specialty Retail industry. What’s more interesting is that, Platform Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 Platform Group generate?

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XTRA:FSNT Earnings and Revenue Growth July 12th 2024

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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Platform Group, at least in the near future.

What This Means For You

Are you a shareholder? Although FSNT is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to FSNT, or whether diversifying into another stock may be a better move for your total risk and return.