Is It Time To Consider Buying CTS Eventim AG & Co. KGaA (ETR:EVD)?

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 €58.70 at one point, and dropping to the lows of €40.84. 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 €40.84 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.

See 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 6.0% below my intrinsic value, which means if you buy CTS Eventim KGaA today, you’d be paying a fair price for it. And if you believe that the stock is really worth €43.46, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that CTS Eventim KGaA’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of CTS Eventim KGaA 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. With profit expected to grow by 64% 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? It seems like the market has already priced in EVD’s positive outlook, 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 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.

So while earnings quality is important, it's equally important to consider the risks facing CTS Eventim KGaA at this point in time. Every company has risks, and we've spotted 1 warning sign for CTS Eventim KGaA you should know about.

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.