Is It Too Late To Consider Buying ENEA S.A. (WSE:ENA)?

ENEA S.A. (WSE:ENA), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the WSE over the last few months, increasing to zł10.65 at one point, and dropping to the lows of zł7.75. 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 ENEA's current trading price of zł7.75 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ENEA’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 ENEA

What is ENEA worth?

Great news for investors – ENEA is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is PLN11.52, but it is currently trading at zł7.75 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, ENEA’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of ENEA look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 an extreme expected decline in the top-line over the next couple of years, near-term growth is certainly not a driver of a buy decision. Even with a larger decline in expenses, it seems like high uncertainty is on the cards for ENEA.

What this means for you:

Are you a shareholder? Although ENA is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to ENA, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on ENA for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into ENEA, you'd also look into what risks it is currently facing. For example, ENEA has 2 warning signs (and 1 which is significant) we think you should know about.

If you are no longer interested in ENEA, 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.