Is It Time To Consider Buying Compagnie Plastic Omnium SE (EPA:POM)?

While Compagnie Plastic Omnium SE (EPA:POM) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the ENXTPA over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Compagnie Plastic Omnium’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Compagnie Plastic Omnium

What Is Compagnie Plastic Omnium Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 10.69x is currently trading in-line with its industry peers’ ratio, which means if you buy Compagnie Plastic Omnium today, you’d be paying a relatively sensible price for it. Is there another opportunity to buy low in the future? Since Compagnie Plastic Omnium’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

Can we expect growth from Compagnie Plastic Omnium?

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 58% over the next couple of years, the future seems bright for Compagnie Plastic Omnium. 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 POM’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at POM? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on POM, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for POM, 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. At Simply Wall St, we found 3 warning signs for Compagnie Plastic Omnium and we think they deserve your attention.

If you are no longer interested in Compagnie Plastic Omnium, 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.