At €138, Is It Time To Put adesso SE (ETR:ADN1) On Your Watch List?

adesso SE (ETR:ADN1), is not the largest company out there, but it led the XTRA gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine adesso’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for adesso

What Is adesso Worth?

According to my valuation model, adesso seems to be fairly priced at around 12.71% above my intrinsic value, which means if you buy adesso today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €122.08, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that adesso’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.

What does the future of adesso look like?

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 86% over the next couple of years, the future seems bright for adesso. 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 already priced in ADN1’s positive outlook, 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 ADN1, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about adesso as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 1 warning sign for adesso you should know about.

If you are no longer interested in adesso, 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.