UK Markets open in 3 hrs 3 mins

Should You Investigate Wacker Neuson SE (FRA:WAC) At €24.64?

Simply Wall St

Wacker Neuson SE (FRA:WAC), which is in the machinery business, and is based in Germany, led the DB gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Wacker Neuson’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Wacker Neuson

What is Wacker Neuson worth?

According to my valuation model, Wacker Neuson seems to be fairly priced at around 5.05% above my intrinsic value, which means if you buy Wacker Neuson today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth €23.45, 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 Wacker Neuson’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.

Can we expect growth from Wacker Neuson?

DB:WAC Past and Future Earnings, April 16th 2019

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. Though in the case of Wacker Neuson, it is expected to deliver a relatively unexciting earnings growth of 4.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? WAC’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on WAC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining 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 Wacker Neuson. You can find everything you need to know about Wacker Neuson in the latest infographic research report. If you are no longer interested in Wacker Neuson, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.