Should You Think About Buying Ströer SE & Co. KGaA (ETR:SAX) Now?

While Ströer SE & Co. KGaA (ETR:SAX) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the XTRA. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Ströer SE KGaA’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Ströer SE KGaA

What's The Opportunity In Ströer SE KGaA?

Good news, investors! Ströer SE KGaA is still a bargain right now. According to my valuation, the intrinsic value for the stock is €75.11, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Ströer SE KGaA’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Ströer SE KGaA?

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. However, with a negative profit growth of -7.2% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Ströer SE KGaA. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although SAX is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to SAX, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on SAX for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into Ströer SE KGaA, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Ströer SE KGaA you should know about.

If you are no longer interested in Ströer SE 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.