Is Meier Tobler Group AG (VTX:MTG) Potentially Undervalued?

While Meier Tobler Group AG (VTX:MTG) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF51.90 at one point, and dropping to the lows of CHF32.25. 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 Meier Tobler Group's current trading price of CHF33.10 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Meier Tobler Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Meier Tobler Group

What Is Meier Tobler Group Worth?

Good news, investors! Meier Tobler Group is still a bargain right now according to my price multiple model, which compares 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 Meier Tobler Group’s ratio of 10.92x is below its peer average of 29.54x, which indicates the stock is trading at a lower price compared to the Building industry. However, given that Meier Tobler Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Meier Tobler Group 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. However, with an expected decline of -1.9% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Meier Tobler Group. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although MTG is currently trading below the industry PE ratio, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to MTG, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on MTG for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Meier Tobler Group has 4 warning signs and it would be unwise to ignore them.

If you are no longer interested in Meier Tobler Group, 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.