At CHF170, Is Flughafen Zürich AG (VTX:FHZN) Worth Looking At Closely?

While Flughafen Zürich AG (VTX:FHZN) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the SWX. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Flughafen Zürich’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Flughafen Zürich

What's the opportunity in Flughafen Zürich?

According to my valuation model, Flughafen Zürich seems to be fairly priced at around 4.8% below my intrinsic value, which means if you buy Flughafen Zürich today, you’d be paying a fair price for it. And if you believe that the stock is really worth CHF178.34, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Flughafen Zürich’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Flughafen Zürich 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 Flughafen Zürich's case, its revenues over the next couple of years are expected to double, indicating an incredibly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? FHZN’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on FHZN, now may not be the most advantageous 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.

If you'd like to know more about Flughafen Zürich as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Flughafen Zürich, and understanding this should be part of your investment process.

If you are no longer interested in Flughafen Zürich, 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.