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What Does Randstad N.V.'s (AMS:RAND) Share Price Indicate?

Randstad N.V. (AMS:RAND), which is in the professional services business, and is based in Netherlands, received a lot of attention from a substantial price movement on the ENXTAM over the last few months, increasing to €50.54 at one point, and dropping to the lows of €42.13. 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 Randstad's current trading price of €42.13 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 Randstad’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 Randstad

Is Randstad still cheap?

Great news for investors – Randstad is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €53.3, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Randstad’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of Randstad look like?

ENXTAM:RAND Past and Future Earnings, August 13th 2019
ENXTAM:RAND Past and Future Earnings, August 13th 2019

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 8.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Randstad, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since RAND is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on RAND for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RAND. 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Randstad. You can find everything you need to know about Randstad in the latest infographic research report. If you are no longer interested in Randstad, 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 editorial-team@simplywallst.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.

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