At €15.10, Is It Time To Put EVS Broadcast Equipment SA (EBR:EVS) On Your Watch List?

EVS Broadcast Equipment SA (EBR:EVS), is not the largest company out there, but it led the ENXTBR gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine EVS Broadcast Equipment’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for EVS Broadcast Equipment

What is EVS Broadcast Equipment worth?

Great news for investors – EVS Broadcast Equipment is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that EVS Broadcast Equipment’s ratio of 10.93x is below its peer average of 27.73x, which indicates the stock is trading at a lower price compared to the Communications industry. Another thing to keep in mind is that EVS Broadcast Equipment’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of EVS Broadcast Equipment look like?

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. However, with a relatively muted profit growth of 3.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for EVS Broadcast Equipment, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since EVS is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on EVS for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EVS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in EVS Broadcast Equipment, 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. 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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