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The Platform Group AG (ETR:FSNT), is not the largest company out there, but it saw significant share price movement during recent months on the XTRA, rising to highs of €8.66 and falling to the lows of €7.20. 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 Platform Group's current trading price of €7.60 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Platform 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 Platform Group
Is Platform Group Still Cheap?
Good news, investors! Platform Group 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 Platform Group’s ratio of 2.77x is below its peer average of 9.28x, which indicates the stock is trading at a lower price compared to the Specialty Retail industry. Although, there may be another chance to buy again in the future. This is because Platform Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Platform Group look like?
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 Platform Group, at least in the near future.
What This Means For You
Are you a shareholder? Although FSNT is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to FSNT, or whether diversifying into another stock may be a better move for your total risk and return.