Should You Investigate Vivendi SE (EPA:VIV) At €10.75?

Today we're going to take a look at the well-established Vivendi SE (EPA:VIV). The company's stock received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €12.15 at one point, and dropping to the lows of €10.75. 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 Vivendi's current trading price of €10.75 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Vivendi’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 Vivendi

What is Vivendi worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.2% below my intrinsic value, which means if you buy Vivendi today, you’d be paying a fair price for it. And if you believe that the stock is really worth €11.22, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Vivendi’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Vivendi generate?

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. Though in the case of Vivendi, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? VIV seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on VIV for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on VIV should the price fluctuate below its true value.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Our analysis shows 3 warning signs for Vivendi (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

If you are no longer interested in Vivendi, 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.