Is it too late to consider buying Bystronic AG (VTX:BYS)?

Bystronic AG (VTX:BYS) isn’t the biggest company out there, but it has received a lot of attention due to a significant price movement on the SWX over the past few months, at one point rising up to ‘to 478 CHF and falling to the lowest of 400 CHF. Certain stock price movements can give investors a better opportunity to enter the stock and potentially buy at a lower price. One question that needs to be answered is whether Bystronic’s current price of CHF 408 reflects the true value of the small cap? Or is it currently undervalued, giving us an opportunity to buy? Let’s take a look at Bystronic’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Bystronic

What is Bystronic worth?

The stock price looks reasonable at the moment according to our price multiple model, in which we compare the company’s price-to-earnings ratio to the industry average. We used the price-to-earnings ratio in this case because there is not enough visibility to forecast its cash flows. The stock’s ratio of 20.14x is currently trading slightly above its industry peers’ ratio of 18.97x, meaning if you buy Bystronic today, you’ll be paying a relatively reasonable price. And if you think Bystronic should trade in this range, then there isn’t really much room for the stock price to rise beyond the levels of other industry competitors over the long term. Is there another opportunity to buy low in the future? Since Bystronic’s share price is quite volatile, we could potentially see it fall (or rise) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What kind of growth will Bystronic generate?

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. Buying a great company with a strong outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, in the case of Bystronic, negative earnings growth of -10% is expected, which does not help strengthen its investment thesis. It appears that the risk of future uncertainty is high, at least in the short term.

What this means for you

Are you a shareholder? Currently, BYS appears to be trading around industry price multiples, but given the uncertainty of negative returns in the future, this could be a good time to de-risk your portfolio. Is your current exposure to the stock beneficial to your overall portfolio? And is the opportunity cost of holding a stock with a negative outlook too high? Before making a decision about BYS, check if its fundamentals have changed.

Are you a potential investor? If you’ve been watching BYS for a while, now may not be the most advantageous time to buy, given that the stock is trading around industry price multiples. This means there is less benefit from mispricing. Additionally, negative growth prospects increase the risk of holding the stock. However, there are also other important factors that we haven’t considered today, which can help solidify your view on BYS if the price fluctuates below the industry PE ratio.

If you want to dig deeper into Bystronic, you will also look at the risks it currently faces. Every business has risks, and we have spotted 2 warning signs for Bystronic you should know that.

If Bystronic no longer interests you, you can use our free platform to consult our list of more than 50 other stocks with high growth potential.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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