Is Now The Time To Look At Buying Linedata Services S.A. (EPA:LIN)?

Linedata Services S.A. (EPA:LIN), is not the largest company out there, but it saw a decent share price growth in the teens level on the ENXTPA over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Linedata Services’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Linedata Services

What's the opportunity in Linedata Services?

Good news, investors! Linedata Services is still a bargain right now. According to my valuation, the intrinsic value for the stock is €61.79, but it is currently trading at €37.50 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Linedata Services’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of Linedata Services 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 a relatively muted profit growth of 8.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Linedata Services, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since LIN is currently undervalued, it may be a great time to increase your holdings in the stock. 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 LIN for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LIN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you want to dive deeper into Linedata Services, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 3 warning signs with Linedata Services, and understanding these should be part of your investment process.

If you are no longer interested in Linedata Services, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

If you decide to trade Linedata Services, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.