Is It Too Late To Buy Gigaset AG (ETR:GGS)?
Gigaset AG (XTRA:GGS), a communications company based in Germany, received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €0.77 at one point, and dropping to the lows of €0.62. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Gigaset’s current trading price of €0.64 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 Gigaset’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 Gigaset
What’s the opportunity in Gigaset?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4% above my intrinsic value, which means if you buy Gigaset today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €0.61, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Gigaset’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Gigaset generate?
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. Though in the case of Gigaset, it is expected to deliver a relatively unexciting top-line growth of 3.24% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? GGS’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 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 GGS, now may not be the most advantageous 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 Gigaset. You can find everything you need to know about Gigaset in the latest infographic research report. If you are no longer interested in Gigaset, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
