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- SWX:ADEN
At CHF33.78, Is Adecco Group AG (VTX:ADEN) Worth Looking At Closely?
Adecco Group AG (VTX:ADEN), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the SWX. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Adecco Group’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Adecco Group
What's The Opportunity In Adecco Group?
Good news, investors! Adecco 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 Adecco Group’s ratio of 12.28x is below its peer average of 19.07x, which indicates the stock is trading at a lower price compared to the Professional Services industry. What’s more interesting is that, Adecco Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Adecco 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. Adecco Group's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since ADEN is currently below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on ADEN for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ADEN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.
If you want to dive deeper into Adecco Group, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Adecco Group you should be mindful of and 1 of these is concerning.
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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.
About SWX:ADEN
Adecco Group
Provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa.
Very undervalued with mediocre balance sheet.