Is Now An Opportune Moment To Examine Shurgard Self Storage S.A. (EBR:SHUR)?

Shurgard Self Storage S.A. (EBR:SHUR), is not the largest company out there, but it saw significant share price movement during recent months on the ENXTBR, rising to highs of €40.20 and falling to the lows of €32.70. 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 Shurgard Self Storage's current trading price of €35.00 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Shurgard Self Storage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Shurgard Self Storage

Is Shurgard Self Storage still cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.64x is currently trading slightly above its industry peers’ ratio of 7.68x, which means if you buy Shurgard Self Storage today, you’d be paying a relatively reasonable price for it. And if you believe that Shurgard Self Storage should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, Shurgard Self Storage’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What kind of growth will Shurgard Self Storage 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. 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 32% over the next couple of years, the future seems bright for Shurgard Self Storage. 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 SHUR’s positive outlook, with shares trading around industry price multiples. 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 SHUR? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on SHUR, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for SHUR, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 2 warning signs for Shurgard Self Storage you should be aware of.

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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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