Is It Time To Consider Buying EdiliziAcrobatica S.p.A. (BIT:EDAC)?

EdiliziAcrobatica S.p.A. (BIT:EDAC), is not the largest company out there, but it received a lot of attention from a substantial price movement on the BIT over the last few months, increasing to €18.20 at one point, and dropping to the lows of €12.40. 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 EdiliziAcrobatica's current trading price of €12.40 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at EdiliziAcrobatica’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for EdiliziAcrobatica

What Is EdiliziAcrobatica Worth?

According to my 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. 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 EdiliziAcrobatica’s ratio of 11.76x is trading in-line with its industry peers’ ratio, which means if you buy EdiliziAcrobatica 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 EdiliziAcrobatica’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 EdiliziAcrobatica look like?

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. With profit expected to more than double over the next couple of years, the future seems bright for EdiliziAcrobatica. 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? EDAC’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 EDAC? 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 an eye on EDAC, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for EDAC, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about EdiliziAcrobatica as a business, it's important to be aware of any risks it's facing. For example, we've found that EdiliziAcrobatica has 4 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

If you are no longer interested in EdiliziAcrobatica, 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.