Is Now An Opportune Moment To Examine Zehnder Group AG (VTX:ZEHN)?

While Zehnder Group AG (VTX:ZEHN) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the SWX. Less-covered, small caps sees 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 Zehnder Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Zehnder Group

What is Zehnder Group worth?

According to my valuation model, Zehnder Group seems to be fairly priced at around 7.7% below my intrinsic value, which means if you buy Zehnder Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CHF82.64, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Zehnder Group has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Zehnder Group generate?

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. With profit expected to grow by 23% over the next couple of years, the future seems bright for Zehnder Group. 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 ZEHN’s positive outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on ZEHN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, 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. Every company has risks, and we've spotted 1 warning sign for Zehnder Group you should know about.

If you are no longer interested in Zehnder Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

If you’re looking to trade Zehnder Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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