Is There Now An Opportunity In A.S. Création Tapeten AG (ETR:ACWN)?

A.S. Création Tapeten AG (ETR:ACWN), is not the largest company out there, but it saw significant share price movement during recent months on the XTRA, rising to highs of €29.40 and falling to the lows of €21.20. 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 A.S. Création Tapeten's current trading price of €21.20 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 A.S. Création Tapeten’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for A.S. Création Tapeten

What is A.S. Création Tapeten worth?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. 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 A.S. Création Tapeten’s ratio of 10.46x is trading slightly below its industry peers’ ratio of 12x, which means if you buy A.S. Création Tapeten today, you’d be paying a reasonable price for it. And if you believe that A.S. Création Tapeten should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Although, there may be an opportunity to buy in the future. This is because A.S. Création Tapeten’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 A.S. Création Tapeten?

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. With profit expected to grow by 26% over the next couple of years, the future seems bright for A.S. Création Tapeten. 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? ACWN’s optimistic future growth appears to have been factored into the current share price, 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 ACWN? 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 ACWN, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for ACWN, which means it’s worth further examining 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 A.S. Création Tapeten as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 3 warning signs for A.S. Création Tapeten and we think they deserve your attention.

If you are no longer interested in A.S. Création Tapeten, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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