ElringKlinger AG (ETR:ZIL2), 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 €10.64 at one point, and dropping to the lows of €8.02. 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 ElringKlinger's current trading price of €8.22 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 ElringKlinger’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for ElringKlinger
What Is ElringKlinger Worth?
Great news for investors – ElringKlinger is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €12.21, but it is currently trading at €8.22 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, ElringKlinger’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 ElringKlinger generate?
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. ElringKlinger's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since ZIL2 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ZIL2 for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ZIL2. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.