At €6.66, Is SergeFerrari Group SA (EPA:SEFER) Worth Looking At Closely?

SergeFerrari Group SA (EPA:SEFER), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the ENXTPA. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on SergeFerrari Group’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for SergeFerrari Group

Is SergeFerrari Group Still Cheap?

Good news, investors! SergeFerrari Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €10.01, but it is currently trading at €6.66 on the share market, meaning that there is still an opportunity to buy now. However, given that SergeFerrari Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of SergeFerrari Group look like?

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 SergeFerrari Group, at least in the near future.

What This Means For You

Are you a shareholder? Although SEFER 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 SEFER, 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 SEFER for a while, but hesitant on making the leap, I recommend you dig deeper 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To help with this, we've discovered 5 warning signs (3 can't be ignored!) that you ought to be aware of before buying any shares in SergeFerrari Group.

If you are no longer interested in SergeFerrari Group, 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.