When Should You Buy Titan S.A. (ATH:TITC)?

While Titan S.A. (ATH:TITC) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the ATSE over the last few months, increasing to €41.85 at one point, and dropping to the lows of €35.50. 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 Titan's current trading price of €36.30 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Titan’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is Titan Worth?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.94x is currently trading slightly below its industry peers’ ratio of 15.19x, which means if you buy Titan today, you’d be paying a reasonable price for it. And if you believe that Titan should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Furthermore, Titan’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Check out our latest analysis for Titan

What kind of growth will Titan generate?

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. With profit expected to grow by 61% over the next couple of years, the future seems bright for Titan. 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? TITC’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 TITC? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on TITC, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for TITC, 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.

If you want to dive deeper into Titan, you'd also look into what risks it is currently facing. For example - Titan has 2 warning signs we think you should be aware of.

If you are no longer interested in Titan, 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.