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Is There Now An Opportunity In Altarea SCA (EPA:ALTA)?

Simply Wall St

Altarea SCA (EPA:ALTA), which is in the reits business, and is based in France, received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €204 at one point, and dropping to the lows of €104. 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 Altarea's current trading price of €111 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 Altarea’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Altarea

What is Altarea worth?

Great news for investors – Altarea is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €206.94, but it is currently trading at €111 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Altarea’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of Altarea look like?

ENXTPA:ALTA Past and Future Earnings May 25th 2020

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 1.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Altarea, at least in the short term.

What this means for you:

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

Are you a potential investor? If you’ve been keeping an eye on ALTA 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 ALTA. But before you make any investment decisions, consider other factors such as the track record of its management team, 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 Altarea. You can find everything you need to know about Altarea in the latest infographic research report. If you are no longer interested in Altarea, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.