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Let's talk about the popular Infineon Technologies AG (ETR:IFX). The company's shares received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €20.17 at one point, and dropping to the lows of €16.58. 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 Infineon Technologies's current trading price of €17.67 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 Infineon Technologies’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 Infineon Technologies
Is Infineon Technologies still cheap?
Great news for investors – Infineon Technologies is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €25.54, but it is currently trading at €17.67 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Infineon Technologies’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Infineon Technologies look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 Infineon Technologies, it is expected to deliver a relatively unexciting earnings growth of 0.07%, 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? Even though growth is relatively muted, since IFX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.