At CHF2,370, Is It Time To Put Gurit Holding AG (VTX:GUR) On Your Watch List?

Gurit Holding AG (VTX:GUR), might not be a large cap stock, but it saw significant share price movement during recent months on the SWX, rising to highs of CHF2,700 and falling to the lows of CHF2,245. 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 Gurit Holding's current trading price of CHF2,370 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 Gurit Holding’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 Gurit Holding

What is Gurit Holding worth?

Good news, investors! Gurit Holding 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 Gurit Holding’s ratio of 23.87x is below its peer average of 47.8x, which indicates the stock is trading at a lower price compared to the Chemicals industry. However, given that Gurit 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.

What kind of growth will Gurit Holding generate?

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 a relatively muted profit growth of 5.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Gurit Holding, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since GUR is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on GUR for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GUR. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

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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.
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