While RATIONAL Aktiengesellschaft (ETR:RAA) might not have the largest market cap around , it saw significant share price movement during recent months on the XTRA, rising to highs of €746 and falling to the lows of €636. 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 RATIONAL's current trading price of €648 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at RATIONAL's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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According to our valuation model, RATIONAL seems to be fairly priced at around 6.17% above our intrinsic value, which means if you buy RATIONAL today, you'd be paying a relatively fair price for it. And if you believe the company's true value is €609.85, then there isn't really any room for the share price grow beyond what it's currently trading. So, is there another chance to buy low in the future? Given that RATIONAL'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.
See our latest analysis for RATIONAL
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. RATIONAL's earnings over the next few years are expected to increase by 20%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
Are you a shareholder? It seems like the market has already priced in RAA's positive outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?