At €12.98, Is It Time To Put Terna Energy Societe Anonyme Commercial Technical Company (ATH:TENERGY) On Your Watch List?

Terna Energy Societe Anonyme Commercial Technical Company (ATH:TENERGY), might not be a large cap stock, but it saw a decent share price growth in the teens level on the ATSE over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Terna Energy Societe Anonyme Commercial Technical’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Terna Energy Societe Anonyme Commercial Technical

Is Terna Energy Societe Anonyme Commercial Technical still cheap?

The share price seems sensible at the moment 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 Terna Energy Societe Anonyme Commercial Technical’s ratio of 31.1x is trading in-line with its industry peers’ ratio, which means if you buy Terna Energy Societe Anonyme Commercial Technical today, you’d be paying a relatively sensible price for it. Although, there may be an opportunity to buy in the future. This is because Terna Energy Societe Anonyme Commercial Technical’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Terna Energy Societe Anonyme Commercial Technical look like?

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 more than double over the next couple of years, the future seems bright for Terna Energy Societe Anonyme Commercial Technical. 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? TENERGY’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 financial strength of the company. Have these factors changed since the last time you looked at TENERGY? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on TENERGY, 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 TENERGY, 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 Terna Energy Societe Anonyme Commercial Technical, you'd also look into what risks it is currently facing. Our analysis shows 2 warning signs for Terna Energy Societe Anonyme Commercial Technical (1 is concerning!) and we strongly recommend you look at these before investing.

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This article by Simply Wall St is general in nature. 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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