When Should You Buy VusionGroup S.A. (EPA:VU)?

While VusionGroup S.A. (EPA:VU) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the ENXTPA over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on VusionGroup’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for VusionGroup

What's The Opportunity In VusionGroup?

According to our valuation model, VusionGroup seems to be fairly priced at around 9.2% below our intrinsic value, which means if you buy VusionGroup today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €191.45, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, VusionGroup’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will VusionGroup generate?

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. 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. With revenue expected to more than double in the next few years, the future appears to be extremely bright for VusionGroup. If expenses can also be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? VU’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on VU, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

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. While conducting our analysis, we found that VusionGroup has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in VusionGroup, 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.