What Is Public Power Corporation S.A.'s (ATH:PPC) Share Price Doing?

While Public Power Corporation S.A. (ATH:PPC) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the ATSE. As a €2.3b market cap stock, it seems odd Public Power is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Public Power’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Public Power

What is Public Power worth?

The stock is currently trading at €9.72 on the share market, which means it is overvalued by 32% compared to my intrinsic value of €7.34. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Public Power’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

What kind of growth will Public Power 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. 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. Public Power's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in PPC’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe PPC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on PPC for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for PPC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 2 warning signs for Public Power (1 doesn't sit too well with us) you should be familiar with.

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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.
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