Ansaldo STS Sp.A. (BIT:STS), a infrastructure company based in Italy, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of €12.12 to €12.8. However, is this the true valuation level of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ansaldo STS’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Ansaldo STS
What’s the opportunity in Ansaldo STS?According to my valuation model, the stock is currently overvalued by about 83%, trading at €12.20 compared to my intrinsic value of €6.67. Not the best news for investors looking to buy! Furthermore, Ansaldo STS’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Ansaldo STS 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. 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. Ansaldo STS’s earnings over the next few years are expected to increase by 63.44%, 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? STS’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 STS 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 STS 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 STS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Ansaldo STS. You can find everything you need to know about Ansaldo STS in the latest infographic research report. If you are no longer interested in Ansaldo STS, you can use our free platform to see my list of over 50 other stocks with a high growth potential.