De'Longhi S.p.A. (BIT:DLG), which is in the consumer durables business, and is based in Italy, saw significant share price movement during recent months on the BIT, rising to highs of €19.35 and falling to the lows of €16.40. 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 De'Longhi's current trading price of €16.76 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at De'Longhi’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is De'Longhi worth?
According to my valuation model, De'Longhi seems to be fairly priced at around 4.11% above my intrinsic value, which means if you buy De'Longhi today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €16.10, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, De'Longhi’s low beta implies that the stock is less volatile than the wider market.
What does the future of De'Longhi look like?
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. Though in the case of De'Longhi, it is expected to deliver a relatively unexciting earnings growth of 8.7%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in DLG’s future outlook, 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 conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on DLG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on De'Longhi. You can find everything you need to know about De'Longhi in the latest infographic research report. If you are no longer interested in De'Longhi, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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