Dr. Hönle AG (ETR:HNL), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €52.30 at one point, and dropping to the lows of €44.25. 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 Dr. Hönle's current trading price of €46.00 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 Dr. Hönle’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 Dr. Hönle
What is Dr. Hönle worth?
Great news for investors – Dr. Hönle is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €58.53, but it is currently trading at €46.00 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Dr. Hönle’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Dr. Hönle?
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. Dr. Hönle's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since HNL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on HNL for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HNL. 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 buy.
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. For example, Dr. Hönle has 4 warning signs (and 1 which is concerning) we think you should know about.
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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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About XTRA:HNL
Dr. Hönle
Engages in the supply of industrial UV technologies and systems in Germany and internationally.
Undervalued with reasonable growth potential.
