Why Cegedim SA (EPA:CGM) Could Be Worth Watching

Cegedim SA (EPA:CGM), which is in the healthcare services business, and is based in France, saw significant share price movement during recent months on the ENXTPA, rising to highs of €31.40 and falling to the lows of €19.94. 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 Cegedim's current trading price of €21.20 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Cegedim’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Cegedim

What is Cegedim worth?

Great news for investors – Cegedim is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €38.11, but it is currently trading at €21.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Cegedim’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.

Can we expect growth from Cegedim?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Cegedim’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since CGM is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on CGM for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CGM. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cegedim. You can find everything you need to know about Cegedim in the latest infographic research report. If you are no longer interested in Cegedim, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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.

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