Is Now The Time To Look At Buying SBF AG (FRA:CY1K)?

SBF AG (FRA:CY1K), is not the largest company out there, but it saw a decent share price growth in the teens level on the DB over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at SBF’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for SBF

Is SBF Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.8% below my intrinsic value, which means if you buy SBF today, you’d be paying a fair price for it. And if you believe that the stock is really worth €4.35, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, SBF’s low beta implies that the stock is less volatile than the wider market.

What does the future of SBF 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. In SBF's case, its revenues over the next few years are expected to grow by 63%, indicating a highly 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? CY1K’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 tabs on CY1K, now may not be the most optimal 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that SBF has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in SBF, 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.