Is It Too Late To Consider Buying Nabaltec AG (ETR:NTG)?

Nabaltec AG (ETR:NTG), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the XTRA over the last few months. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. As a small cap stock, which tends to lack high analyst coverage, 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 examine Nabaltec’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Nabaltec

What's The Opportunity In Nabaltec?

According to our valuation model, Nabaltec seems to be fairly priced at around 9.1% below our intrinsic value, which means if you buy Nabaltec today, you’d be paying a fair price for it. And if you believe the company’s true value is €18.43, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Nabaltec’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

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What does the future of Nabaltec 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. Though in the case of Nabaltec, it is expected to deliver a relatively unexciting earnings growth of 3.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in NTG’s future outlook, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on NTG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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 want to dive deeper into Nabaltec, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Nabaltec, and understanding this should be part of your investment process.

If you are no longer interested in Nabaltec, 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.