Is Figeac Aero Société Anonyme's (EPA:FGA) Future Growth Already Accounted For In Today's Price?

Published
June 30, 2019
ENXTPA:FGA

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Looking at Figeac Aero Société Anonyme’s (EPA:FGA) fundamentals some investors are wondering if its last closing price of €11.5 represents a good value for money for this high growth stock. Let’s look into this by assessing FGA's expected growth over the next few years.

See our latest analysis for Figeac Aero Société Anonyme

Exciting times ahead?

If you are bullish about Figeac Aero Société Anonyme's growth potential then you are certainly not alone. Expectations from 5 analysts are extremely bullish with earnings forecasted to rise significantly from today's level of €0.846 to €1.329 over the next three years. This results in an annual growth rate of 23%, on average, which signals a market-beating outlook in the upcoming years.

Is FGA's share price justified by its earnings growth?

Figeac Aero Société Anonyme is trading at quite low price-to-earnings (PE) ratio of 13.6x. This tells us the stock is undervalued relative to the current FR market average of 18.05x , and undervalued based on its latest annual earnings update compared to the Aerospace & Defense average of 24.78x .

ENXTPA:FGA Price Estimation Relative to Market, July 1st 2019

We already know that FGA appears to be undervalued based on its PE ratio, compared to the industry average. However, seeing as Figeac Aero Société Anonyme is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 13.6x and expected year-on-year earnings growth of 23% give Figeac Aero Société Anonyme a very low PEG ratio of 0.60x. This tells us that when we include its growth in our analysis Figeac Aero Société Anonyme's stock can be considered relatively cheap , based on its fundamentals.

What this means for you:

FGA's current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you're a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

  1. Financial Health: Are FGA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Past Track Record: Has FGA been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of FGA's historicals for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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