At €23.05, Is It Time To Put INDUS Holding AG (ETR:INH) On Your Watch List?

INDUS Holding AG (ETR:INH), might not be a large cap stock, but it saw significant share price movement during recent months on the XTRA, rising to highs of €28.75 and falling to the lows of €21.00. 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 INDUS Holding's current trading price of €23.05 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 INDUS Holding’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for INDUS Holding

Is INDUS Holding still cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 15.82x is currently trading in-line with its industry peers’ ratio, which means if you buy INDUS Holding today, you’d be paying a relatively reasonable price for it. Although, there may be an opportunity to buy in the future. This is because INDUS Holding’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.

What does the future of INDUS Holding look like?

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. 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. With profit expected to more than double over the next couple of years, the future seems bright for INDUS Holding. 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 INH’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at INH? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on INH, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for INH, 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 INDUS Holding as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with INDUS Holding (including 1 which is a bit unpleasant).

If you are no longer interested in INDUS Holding, 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.