What Does H&R GmbH & Co. KGaA's (ETR:2HRA) Share Price Indicate?
H&R GmbH & Co. KGaA (ETR:2HRA), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the XTRA. 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 H&R GmbH KGaA’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for H&R GmbH KGaA
What's The Opportunity In H&R GmbH KGaA?
Great news for investors – H&R GmbH KGaA is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €8.98, but it is currently trading at €6.26 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, H&R GmbH KGaA’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.
Can we expect growth from H&R GmbH KGaA?
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. 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 H&R GmbH KGaA, at least in the near future.
What This Means For You
Are you a shareholder? Although 2HRA is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to 2HRA, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on 2HRA for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 1 warning sign for H&R GmbH KGaA and you'll want to know about this.
If you are no longer interested in H&R GmbH KGaA, 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.
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