Is Bobst Group SA’s (VTX:BOBNN) Stock Available For A Good Price After Accounting For Growth?

Growth expectations for Bobst Group SA (VTX:BOBNN) are high, but many investors are starting to ask whether its last close at CHF47.88 can still be rationalized by the future potential. Let’s take a look at some key metrics to determine whether there’s any value here for current and potential future investors.

Check out our latest analysis for Bobst Group

Should you get excited about BOBNN’s future?

Bobst Group’s extremely high growth potential in the near future is attracting investors. Expectations from 6 analysts are extremely positive with earnings per share estimated to rise from today’s level of CHF2.832 to CHF5.617 over the next three years. On average, this leads to a growth rate of 24% each year, which signals a market-beating outlook in the upcoming years.

Is BOBNN available at a good price after accounting for its growth?

Bobst Group is trading at quite low price-to-earnings (PE) ratio of 16.9x. This tells us the stock is undervalued relative to the current CH market average of 17.77x , and undervalued based on its latest annual earnings update compared to the Machinery average of 17.89x .

SWX:BOBNN Price Estimation Relative to Market, August 18th 2019
SWX:BOBNN Price Estimation Relative to Market, August 18th 2019

Given that BOBNN’s price-to-earnings of 16.9x lies below the industry average, this already indicates that the company could be potentially undervalued. But, since Bobst Group is a high-growth stock, we must also account for its earnings growth by using calculation called the PEG ratio. A PE ratio of 16.9x and expected year-on-year earnings growth of 24% give Bobst Group a very low PEG ratio of 0.70x. This tells us that when we include its growth in our analysis Bobst Group’s stock can be considered relatively cheap , based on its fundamentals.

What this means for you:

BOBNN’s current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you’re a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

  1. Financial Health: Are BOBNN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Past Track Record: Has BOBNN been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of BOBNN’s historicals for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.