Why SÜSS MicroTec SE (ETR:SMHN) Could Be Worth Watching

SÜSS MicroTec SE (ETR:SMHN), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €21.85 at one point, and dropping to the lows of €14.66. 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 SÜSS MicroTec's current trading price of €16.06 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at SÜSS MicroTec’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for SÜSS MicroTec

Is SÜSS MicroTec still cheap?

According to my valuation model, the stock is currently overvalued by about 26%, trading at €16.06 compared to my intrinsic value of €12.77. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since SÜSS MicroTec’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

What does the future of SÜSS MicroTec look like?

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. With profit expected to grow by 84% over the next couple of years, the future seems bright for SÜSS MicroTec. 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 well and truly priced in SMHN’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe SMHN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on SMHN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for SMHN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into SÜSS MicroTec, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for SÜSS MicroTec you should know about.

If you are no longer interested in SÜSS MicroTec, 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.