Is It Too Late To Consider Buying DATAGROUP SE (ETR:D6H)?

DATAGROUP SE (ETR:D6H), is not the largest company out there, but it 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, what if the stock is still a bargain? Today I will analyse the most recent data on DATAGROUP’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for DATAGROUP

Is DATAGROUP still cheap?

According to my valuation model, DATAGROUP seems to be fairly priced at around 19.29% above my intrinsic value, which means if you buy DATAGROUP today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €47.19, there’s only an insignificant downside when the price falls to its real value. What's more, DATAGROUP’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of DATAGROUP look like?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 23% over the next couple of years, the future seems bright for DATAGROUP. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in D6H’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 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 tabs on D6H, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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.

If you want to dive deeper into DATAGROUP, you'd also look into what risks it is currently facing. Our analysis shows 3 warning signs for DATAGROUP (2 are a bit concerning!) and we strongly recommend you look at these before investing.

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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.
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