Should You Think About Buying Nexi S.p.A. (BIT:NEXI) Now?

Today we're going to take a look at the well-established Nexi S.p.A. (BIT:NEXI). The company's stock saw significant share price movement during recent months on the BIT, rising to highs of €13.00 and falling to the lows of €8.59. 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 Nexi's current trading price of €9.20 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Nexi’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 Nexi

Is Nexi still cheap?

According to my valuation model, Nexi seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Nexi today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €11.14, then there’s not much of an upside to gain from mispricing. In addition to this, Nexi has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Nexi 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. Nexi's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? NEXI’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 an eye on NEXI, now may not be the most optimal 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.

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. Every company has risks, and we've spotted 4 warning signs for Nexi (of which 2 are a bit concerning!) you should know about.

If you are no longer interested in Nexi, 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.