Is It Time To Consider Buying De'Longhi S.p.A. (BIT:DLG)?

De'Longhi S.p.A. (BIT:DLG), might not be a large cap stock, but it saw significant share price movement during recent months on the BIT, rising to highs of €24.24 and falling to the lows of €17.44. 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 De'Longhi's current trading price of €18.62 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 De'Longhi’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 De'Longhi

Is De'Longhi still cheap?

Great news for investors – De'Longhi is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €23.73, but it is currently trading at €18.62 on the share market, meaning that there is still an opportunity to buy now. However, given that De'Longhi’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will De'Longhi generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -8.9% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for De'Longhi. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although DLG is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to DLG, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on DLG for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about De'Longhi as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for De'Longhi and you'll want to know about it.

If you are no longer interested in De'Longhi, 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.