Yahoo Finance At €9.38, Is Catering International & Services Société Anonyme (EPA:CTRG) Worth Looking At Closely?
Catering International & Services Société Anonyme (EPA:CTRG), which is in the commercial services business, and is based in France, led the ENXTPA gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Catering International & Services Société Anonyme’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Catering International & Services Société Anonyme
What is Catering International & Services Société Anonyme worth?
According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Catering International & Services Société Anonyme’s ratio of 14.06x is trading slightly above its industry peers’ ratio of 13.27x, which means if you buy Catering International & Services Société Anonyme today, you’d be paying a relatively sensible price for it. And if you believe Catering International & Services Société Anonyme should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that Catering International & Services Société Anonyme’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Catering International & Services Société Anonyme look like?
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. 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 profit expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for Catering International & Services Société Anonyme. 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? CTRG’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 CTRG? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on CTRG, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for CTRG, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Catering International & Services Société Anonyme. You can find everything you need to know about Catering International & Services Société Anonyme in the latest infographic research report. If you are no longer interested in Catering International & Services Société Anonyme, you can use our free platform to see my 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. 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. Thank you for reading.
