Is CTS Eventim AG & Co. KGaA (ETR:EVD) Potentially Undervalued?

CTS Eventim AG & Co. KGaA (ETR:EVD), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €65.10 at one point, and dropping to the lows of €52.70. 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 CTS Eventim KGaA's current trading price of €57.05 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CTS Eventim KGaA’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 CTS Eventim KGaA

Is CTS Eventim KGaA Still Cheap?

According to my valuation model, CTS Eventim KGaA seems to be fairly priced at around 16% below my intrinsic value, which means if you buy CTS Eventim KGaA today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €67.97, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since CTS Eventim KGaA’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.

Can we expect growth from CTS Eventim KGaA?

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 33% over the next couple of years, the future seems bright for CTS Eventim KGaA. 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? EVD’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 an eye on EVD, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. At Simply Wall St, we found 2 warning signs for CTS Eventim KGaA and we think they deserve your attention.

If you are no longer interested in CTS Eventim KGaA, 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.