At €26.29, Is Amplifon S.p.A. (BIT:AMP) Worth Looking At Closely?

Amplifon S.p.A. (BIT:AMP), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the BIT. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Amplifon’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Amplifon

What Is Amplifon Worth?

According to my valuation model, Amplifon seems to be fairly priced at around 18.25% above my intrinsic value, which means if you buy Amplifon today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €22.23, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Amplifon’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Amplifon 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. Amplifon's earnings over the next few years are expected to increase by 35%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? AMP’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on AMP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Amplifon.

If you are no longer interested in Amplifon, 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.