ProSiebenSat.1 Media SE (ETR:PSM), is not the largest company out there, but it saw significant share price movement during recent months on the XTRA, rising to highs of €18.92 and falling to the lows of €16.45. 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 ProSiebenSat.1 Media's current trading price of €16.71 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 ProSiebenSat.1 Media’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for ProSiebenSat.1 Media
Is ProSiebenSat.1 Media still cheap?
Great news for investors – ProSiebenSat.1 Media is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.71x is currently well-below the industry average of 22.24x, meaning that it is trading at a cheaper price relative to its peers. However, given that ProSiebenSat.1 Media’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from ProSiebenSat.1 Media?
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. However, with a relatively muted profit growth of 9.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for ProSiebenSat.1 Media, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since PSM is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on PSM for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PSM. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 2 warning signs for ProSiebenSat.1 Media and you'll want to know about them.
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This article by Simply Wall St is general in nature. 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.
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About XTRA:PSM
ProSiebenSat.1 Media
Operates as a media company in Germany, Austria, Switzerland, the United States, and internationally.
Undervalued with moderate growth potential.
