Should You Think About Buying Rieter Holding AG (VTX:RIEN) Now?

While Rieter Holding AG (VTX:RIEN) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF76.10 at one point, and dropping to the lows of CHF41.55. 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 Rieter Holding's current trading price of CHF41.55 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 Rieter Holding’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In Rieter Holding?

Rieter Holding appears to be overvalued by 22% at the moment, based on our discounted cash flow valuation. The stock is currently priced at CHF41.55 on the market compared to our intrinsic value of CHF34.13. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Rieter Holding’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.

See our latest analysis for Rieter Holding

What kind of growth will Rieter Holding generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. In the upcoming year, Rieter Holding's earnings are expected to increase by 97%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in RIEN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe RIEN 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 an eye on RIEN for a while, 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 RIEN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 3 warning signs for Rieter Holding and we think they deserve your attention.

If you are no longer interested in Rieter Holding, 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.