At €18.85, Is Wiit S.p.A. (BIT:WIIT) Worth Looking At Closely?

Wiit S.p.A. (BIT:WIIT), is not the largest company out there, but it saw significant share price movement during recent months on the BIT, rising to highs of €30.92 and falling to the lows of €18.85. 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 Wiit's current trading price of €18.85 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 Wiit’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Wiit

Is Wiit still cheap?

Wiit appears to be overvalued by 39% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €18.85 on the market compared to my intrinsic value of €13.60. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that Wiit’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 does the future of Wiit 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. 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 62% over the next couple of years, the future seems bright for Wiit. 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? WIIT’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe WIIT should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on WIIT for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for WIIT, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Wiit at this point in time. Case in point: We've spotted 3 warning signs for Wiit you should be mindful of and 1 of these doesn't sit too well with us.

If you are no longer interested in Wiit, 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.