Palfinger AG (VIE:PAL), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the WBAG. 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? Let’s examine Palfinger’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Palfinger
What Is Palfinger Worth?
Good news, investors! Palfinger is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €35.27, but it is currently trading at €23.45 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Palfinger’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Palfinger look like?
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. However, with a negative profit growth of -4.1% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Palfinger. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although PAL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to PAL, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on PAL for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 4 warning signs for Palfinger (2 shouldn't be ignored!) and we strongly recommend you look at them before investing.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
About WBAG:PAL
Undervalued with adequate balance sheet.
