Is Now The Time To Look At Buying Formula One Group (NASDAQ:FWON.K)?

Let's talk about the popular Formula One Group (NASDAQ:FWON.K). The company's shares saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$79.96 and falling to the lows of US$70.01. 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$72.96 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.

See our latest analysis for Formula One Group

Is Formula One Group Still Cheap?

Formula One Group appears to be overvalued by 37% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$72.96 on the market compared to my intrinsic value of $53.19. This means that the opportunity to buy Formula One Group at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Formula One Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Formula One Group generate?

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 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? If you believe FWON.K 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. Given the uncertainty from negative growth in the future, this could be the right time to de-risk your portfolio. 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 tabs on FWON.K for some time, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 1 warning sign for Formula One Group and you'll want to know about it.

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.