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 a decent share price growth in the teens level on the BDL over the last few months. With many analysts covering the mid-cap 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? Today I will analyse the most recent data on SES’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for SES

Is SES still cheap?

According to my valuation model, SES seems to be fairly priced at around 11.18% above my intrinsic value, which means if you buy SES today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €6.51, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, SES’s low beta implies that the stock is less volatile than the wider market.

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. 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. Though in the case of SES, it is expected to deliver a relatively unexciting top-line growth of 1.9% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near 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 around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on SESGL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that SES has 2 warning signs and it would be unwise to ignore them.

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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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