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Jenoptik AG (ETR:JEN), which is in the electronic business, and is based in Germany, saw a decent share price growth in the teens level on the XTRA over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Jenoptik’s outlook and valuation to see if the opportunity still exists.
What is Jenoptik worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.8% below my intrinsic value, which means if you buy Jenoptik today, you’d be paying a fair price for it. And if you believe the company’s true value is €26.39, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Jenoptik’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Jenoptik?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 7.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Jenoptik, at least in the short term.
What this means for you:
Are you a shareholder? JEN’s 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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on JEN, 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 Jenoptik. You can find everything you need to know about Jenoptik in the latest infographic research report. If you are no longer interested in Jenoptik, 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 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.
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