What Is Servizi Italia S.p.A.'s (BIT:SRI) Share Price Doing?

Servizi Italia S.p.A. (BIT:SRI), is not the largest company out there, but it saw significant share price movement during recent months on the BIT, rising to highs of €2.26 and falling to the lows of €2.00. 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 Servizi Italia's current trading price of €2.12 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 Servizi Italia’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Servizi Italia

What's the opportunity in Servizi Italia?

According to my valuation model, Servizi Italia seems to be fairly priced at around 16% below my intrinsic value, which means if you buy Servizi Italia today, you’d be paying a fair price for it. And if you believe that the stock is really worth €2.53, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Servizi Italia’s low beta implies that the stock is less volatile than the wider market.

What does the future of Servizi Italia 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 Servizi Italia. 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? SRI’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on SRI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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 Servizi Italia as a business, it's important to be aware of any risks it's facing. For example, we've discovered 5 warning signs that you should run your eye over to get a better picture of Servizi Italia.

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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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