Is Now The Time To Look At Buying HORNBACH Holding AG & Co. KGaA (ETR:HBH)?

While HORNBACH Holding AG & Co. KGaA (ETR:HBH) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the XTRA. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. With many analysts covering the 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 HORNBACH Holding KGaA’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for HORNBACH Holding KGaA

What Is HORNBACH Holding KGaA Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 19% below our intrinsic value, which means if you buy HORNBACH Holding KGaA today, you’d be paying a fair price for it. And if you believe that the stock is really worth €97.70, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that HORNBACH Holding 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.

Can we expect growth from HORNBACH Holding 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 93% over the next couple of years, the future seems bright for HORNBACH Holding 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? HBH’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 track record of its management team. 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 tabs on HBH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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. While conducting our analysis, we found that HORNBACH Holding KGaA has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in HORNBACH Holding KGaA, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.