Iren SpA (BIT:IRE), is not the largest company out there, but it saw significant share price movement during recent months on the BIT, rising to highs of €2.77 and falling to the lows of €2.39. 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 Iren's current trading price of €2.60 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Iren’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 Iren
What is Iren worth?
Good news, investors! Iren is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 11.28x is currently well-below the industry average of 17.02x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Iren’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Iren generate?
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. However, with a relatively muted profit growth of 3.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Iren, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since IRE is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on IRE for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IRE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.
If you'd like to know more about Iren as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for Iren you should be aware of.
If you are no longer interested in Iren, 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.
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About BIT:IRE
6 star dividend payer and undervalued.
