Is It Time To Consider Buying Somfy SA (EPA:SO)?

While Somfy SA (EPA:SO) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €144 at one point, and dropping to the lows of €118. 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 Somfy's current trading price of €120 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Somfy’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 Somfy

What's The Opportunity In Somfy?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.89% above my intrinsic value, which means if you buy Somfy today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €118.94, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Somfy has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Somfy?

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. However, with a relatively muted profit growth of 4.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Somfy, at least in the short term.

What This Means For You

Are you a shareholder? SO’s future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on SO, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

Diving deeper into the forecasts for Somfy mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Somfy, 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.