Is Now The Time To Look At Buying CTS Eventim AG & Co. KGaA (ETR:EVD)?

CTS Eventim AG & Co. KGaA (ETR:EVD), might not be a large cap stock, but it saw a significant share price rise of 27% in the past couple of months on the XTRA. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a mid-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? Let’s examine CTS Eventim KGaA’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for CTS Eventim KGaA

What Is CTS Eventim KGaA Worth?

According to our valuation model, CTS Eventim KGaA seems to be fairly priced at around 0.05% above our intrinsic value, which means if you buy CTS Eventim KGaA today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €75.06, then there isn’t really any room for the share price grow beyond what it’s currently trading. 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. 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. However, with a negative profit growth of -0.2% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for CTS Eventim KGaA. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? EVD seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on EVD for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on EVD should the price fluctuate below its true value.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 1 warning sign for CTS Eventim KGaA you should be aware of.

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.