At US$64.91, Is It Time To Put Formula One Group (NASDAQ:FWON.K) On Your Watch List?

Formula One Group (NASDAQ:FWON.K) saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$74.13 and falling to the lows of US$61.45. 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 Formula One Group's current trading price of US$64.91 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Formula One Group’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 Formula One Group

What Is Formula One Group Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.24% above my intrinsic value, which means if you buy Formula One Group today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $57.32, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Formula One Group’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 kind of growth will Formula One Group generate?

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 extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Formula One Group, at least in the near future.

What This Means For You

Are you a shareholder? Currently, FWON.K appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on FWON.K for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on FWON.K should the price fluctuate below its true value.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. At Simply Wall St, we found 2 warning signs for Formula One Group and we think they deserve your attention.

If you are no longer interested in Formula One Group, 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.