At €3.12, Is Adeunis Société anonyme (EPA:ALARF) Worth Looking At Closely?

By
Simply Wall St
Published
January 11, 2021
ENXTPA:ALARF
Source: Shutterstock

Adeunis Société anonyme (EPA:ALARF), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the ENXTPA. Less-covered, small caps tend to present 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? Let’s take a look at Adeunis Société anonyme’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Adeunis Société anonyme

Is Adeunis Société anonyme still cheap?

Great news for investors – Adeunis Société anonyme is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Adeunis Société anonyme’s ratio of 5.58x is below its peer average of 35.59x, which indicates the stock is trading at a lower price compared to the Communications industry. Another thing to keep in mind is that Adeunis Société anonyme’s share price is 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 industry peers, 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 Adeunis Société anonyme look like?

earnings-and-revenue-growth
ENXTPA:ALARF Earnings and Revenue Growth January 12th 2021

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. Though in the case of Adeunis Société anonyme, it is expected to deliver a relatively unexciting top-line growth of 1.2% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since ALARF is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on ALARF for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ALARF. 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 assessment.

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. For example, we've found that Adeunis Société anonyme has 3 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.

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

When trading Adeunis Société anonyme or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.