Why Adevinta ASA (OB:ADE) Could Be Worth Watching

Adevinta ASA (OB:ADE), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the OB over the last few months, increasing to kr83.55 at one point, and dropping to the lows of kr71.85. 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 Adevinta's current trading price of kr77.05 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 Adevinta’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Adevinta

What's The Opportunity In Adevinta?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.1% below my intrinsic value, which means if you buy Adevinta today, you’d be paying a fair price for it. And if you believe the company’s true value is NOK81.16, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Adevinta has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Adevinta?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With revenues expected to grow by a double-digit 24% over the next couple of years, the outlook is positive for Adevinta. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? ADE’s optimistic 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on ADE, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which 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.

It can be quite valuable to consider what analysts expect for Adevinta from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Adevinta, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.