Is SES S.A. (BDL:SESGL) Potentially Undervalued?

While SES S.A. (BDL:SESGL) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the BDL, rising to highs of €7.30 and falling to the lows of €6.09. 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 SES' current trading price of €6.56 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 SES’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 SES

What is SES worth?

According to my valuation model, the stock is currently overvalued by about 31%, trading at €6.56 compared to my intrinsic value of €5.02. Not the best news for investors looking to buy! Furthermore, SES’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.

Can we expect growth from SES?

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 revenue growth of 0.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for SES, at least in the short term.

What this means for you:

Are you a shareholder? SESGL’s future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe SESGL 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 an eye on SESGL for a while, 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 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 SES 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 SES you should be mindful of and 1 of these makes us a bit uncomfortable.

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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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