At €5.24, Is Esprinet S.p.A. (BIT:PRT) Worth Looking At Closely?

While Esprinet S.p.A. (BIT:PRT) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the BIT over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Esprinet’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What Is Esprinet Worth?

According to our valuation model, Esprinet seems to be fairly priced at around 19.36% above our intrinsic value, which means if you buy Esprinet today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €4.39, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Esprinet’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

See our latest analysis for Esprinet

What Kind Of Returns Can We Expect From Esprinet In The Future?

What kind of returns can we expect from Esprinet in the future? It’s one thing to get a stock at a low price, but the quality of the company is even more important, as its stock may be cheap or expensive for a reason. A way to assess stock quality is by looking how much it returns to you as the investor compared to how much you’re invested. Esprinet is expected to return 7.5% of your investment in the next couple of years if you buy the stock today. This is a pretty average return, which doesn’t significantly add much to the case for owning the stock.

What This Means For You

Are you a shareholder? PRT’s optimistic future returns 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? And 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 PRT for a while, tentative on committing to the stock, we suggest you further examine the stock. Should the stock become an attractive buy again, you will be more informed to make a decision on PRT. Keep in mind the low future return, and whether the opportunity cost of investing in PRT versus another stock is worth it.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 3 warning signs for Esprinet you should be mindful of and 2 of them make us uncomfortable.

If you are no longer interested in Esprinet, 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.