Why Il Sole 24 ORE S.p.A. (BIT:S24) Could Be Worth Watching

While Il Sole 24 ORE S.p.A. (BIT:S24) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the BIT over the last few months. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Il Sole 24 ORE’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Il Sole 24 ORE

What's the opportunity in Il Sole 24 ORE?

According to my valuation model, Il Sole 24 ORE seems to be fairly priced at around 20% below my intrinsic value, which means if you buy Il Sole 24 ORE today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €0.66, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Il Sole 24 ORE’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Il Sole 24 ORE?

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. With revenues expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for Il Sole 24 ORE. If the level of expenses is able to be maintained, 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? It seems like the market has already priced in S24’s positive outlook, 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 tabs on S24, 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.

If you'd like to know more about Il Sole 24 ORE as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Il Sole 24 ORE you should know about.

If you are no longer interested in Il Sole 24 ORE, 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. 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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