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Is Now An Opportune Moment To Examine mVISE AG (ETR:C1V)?

Simply Wall St

mVISE AG (ETR:C1V), which is in the it business, and is based in Germany, received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €3.67 at one point, and dropping to the lows of €2.70. 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 mVISE's current trading price of €2.93 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 mVISE’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 mVISE

What's the opportunity in mVISE?

The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 36.6x is currently trading slightly above its industry peers’ ratio of 32.73x, which means if you buy mVISE today, you’d be paying a relatively reasonable price for it. And if you believe that mVISE should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since mVISE’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 mVISE generate?

XTRA:C1V Past and Future Earnings, January 18th 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. In mVISE’s case, its revenues over the next few years are expected to grow by 48%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in C1V’s positive 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 C1V? 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 tabs on C1V, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic forecast is encouraging for C1V, which 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 mVISE. You can find everything you need to know about mVISE in the latest infographic research report. If you are no longer interested in mVISE, 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 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.

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. Thank you for reading.