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Piaggio & C. SpA (BIT:PIA), which is in the auto business, and is based in Italy, saw a decent share price growth in the teens level on the BIT over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Piaggio & C’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What's the opportunity in Piaggio & C?
According to my valuation model, Piaggio & C seems to be fairly priced at around 15.9% above my intrinsic value, which means if you buy Piaggio & C today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €2.28, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Piaggio & C’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Piaggio & C generate?
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. With profit expected to grow by 53% over the next couple of years, the future seems bright for Piaggio & C. 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? PIA’s optimistic future growth appears to have been factored into the current share price, 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 PIA, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Piaggio & C. You can find everything you need to know about Piaggio & C in the latest infographic research report. If you are no longer interested in Piaggio & C, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.