Yahoo Finance At €34.10, Is Traton SE (ETR:8TRA) Worth Looking At Closely?
Today we're going to take a look at the well-established Traton SE (ETR:8TRA). The company's stock saw a significant share price rise of 59% in the past couple of months on the XTRA. The recent share price gains has brought the company back closer to its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Traton’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Traton
What Is Traton Worth?
Good news, investors! Traton is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Traton’s ratio of 6.96x is below its peer average of 16.24x, which indicates the stock is trading at a lower price compared to the Machinery industry. What’s more interesting is that, Traton’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 kind of growth will Traton 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. With profit expected to grow by 27% over the next couple of years, the future seems bright for Traton. 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? Since 8TRA is currently below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on 8TRA for a while, now might be the time to make a leap. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 8TRA. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.
If you want to dive deeper into Traton, you'd also look into what risks it is currently facing. For instance, we've identified 2 warning signs for Traton (1 is potentially serious) you should be familiar with.
If you are no longer interested in Traton, 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.
