Should You Think About Buying Esprinet S.p.A. (BIT:PRT) Now?

While Esprinet S.p.A. (BIT:PRT) 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. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? 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.

See our latest analysis for Esprinet

What's the opportunity in Esprinet?

Esprinet appears to be overvalued by 25% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €14.01 on the market compared to my intrinsic value of €11.19. This means that the opportunity to buy Esprinet at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Esprinet’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 Esprinet 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. Esprinet's earnings over the next few years are expected to increase by 42%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in PRT’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe PRT 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 PRT 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 optimistic prospect is encouraging for PRT, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Esprinet as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 3 warning signs for Esprinet and we think they deserve your attention.

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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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