Is There Now An Opportunity In Carl Zeiss Meditec AG (ETR:AFX)?

Today we're going to take a look at the well-established Carl Zeiss Meditec AG (ETR:AFX). The company's stock saw a significant share price rise of 26% in the past couple of months on the XTRA. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Carl Zeiss Meditec’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Carl Zeiss Meditec

Is Carl Zeiss Meditec Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.7% below our intrinsic value, which means if you buy Carl Zeiss Meditec today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €119.14, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Carl Zeiss Meditec’s low beta implies that the stock is less volatile than the wider market.

What does the future of Carl Zeiss Meditec look like?

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. With profit expected to grow by 38% over the next couple of years, the future seems bright for Carl Zeiss Meditec. 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? AFX’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on AFX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

It can be quite valuable to consider what analysts expect for Carl Zeiss Meditec from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Carl Zeiss Meditec, 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.