Is Now The Time To Look At Buying Georg Fischer AG (VTX:GF)?

While Georg Fischer AG (VTX:GF) might not have the largest market cap around , it saw significant share price movement during recent months on the SWX, rising to highs of CHF71.10 and falling to the lows of CHF61.00. 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 Georg Fischer's current trading price of CHF61.35 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 Georg Fischer’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 Georg Fischer

What Is Georg Fischer Worth?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Georg Fischer’s ratio of 21.38x is trading slightly above its industry peers’ ratio of 18.57x, which means if you buy Georg Fischer today, you’d be paying a relatively sensible price for it. And if you believe Georg Fischer should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because Georg Fischer’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Georg Fischer 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. With profit expected to grow by 66% over the next couple of years, the future seems bright for Georg Fischer. 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 GF’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 GF? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on GF, 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 GF, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Georg Fischer, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Georg Fischer (of which 1 is a bit concerning!) you should know about.

If you are no longer interested in Georg Fischer, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com