Stock Analysis

At €99.75, Is Melexis NV (EBR:MELE) Worth Looking At Closely?

ENXTBR:MELE
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Melexis NV (EBR:MELE), might not be a large cap stock, but it led the ENXTBR gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Melexis’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Melexis

What Is Melexis Worth?

The stock is currently trading at €99.75 on the share market, which means it is overvalued by 39% compared to my intrinsic value of €71.73. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Melexis’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Melexis?

earnings-and-revenue-growth
ENXTBR:MELE Earnings and Revenue Growth April 11th 2023

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 a double-digit 18% over the next couple of years, the outlook is positive for Melexis. 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? MELE’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MELE should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MELE for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for MELE, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Melexis, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Melexis, and understanding it should be part of your investment process.

If you are no longer interested in Melexis, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Melexis is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.