Is There Now An Opportunity In ecotel communication ag (ETR:E4C)?

While ecotel communication ag (ETR:E4C) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the XTRA over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine ecotel communication ag’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for ecotel communication ag

What Is ecotel communication ag Worth?

Great news for investors – ecotel communication ag is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €52.38, but it is currently trading at €36.70 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, ecotel communication ag’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 kind of growth will ecotel communication ag generate?

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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for ecotel communication ag, at least in the near future.

What This Means For You

Are you a shareholder? Although E4C is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to E4C, 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 an eye on E4C for a while, 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, ecotel communication ag has 2 warning signs (and 1 which is a bit concerning) we think you should know about.

If you are no longer interested in ecotel communication ag, 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.