Should You Think About Buying EVN AG (VIE:EVN) Now?

EVN AG (VIE:EVN), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the WBAG. As a €3.7b market-cap stock, it seems odd EVN is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s examine EVN’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for EVN

What Is EVN Worth?

According to my valuation model, EVN seems to be fairly priced at around 13% below my intrinsic value, which means if you buy EVN today, you’d be paying a fair price for it. And if you believe the company’s true value is €24.00, then there’s not much of an upside to gain from mispricing. What's more, EVN’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of EVN 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. EVN's earnings over the next few years are expected to increase by 41%, indicating a highly optimistic future ahead. This should lead to more robust 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 EVN’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 track record of its management team. 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 EVN, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that EVN has 3 warning signs and it would be unwise to ignore them.

If you are no longer interested in EVN, you can use our free platform to see our 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. 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.