At UK£4.96, Is B&M European Value Retail S.A. (LON:BME) Worth Looking At Closely?

While B&M European Value Retail S.A. (LON:BME) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the LSE over the last few months. 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, could the stock still be trading at a relatively cheap price? Let’s examine B&M European Value Retail’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for B&M European Value Retail

What Is B&M European Value Retail Worth?

Good news, investors! B&M European Value Retail is still a bargain right now. According to my valuation, the intrinsic value for the stock is £6.68, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, B&M European Value Retail’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from B&M European Value Retail?

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 6.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for B&M European Value Retail, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since BME 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 BME 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 BME. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you want to dive deeper into B&M European Value Retail, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with B&M European Value Retail, and understanding them should be part of your investment process.

If you are no longer interested in B&M European Value Retail, 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.