RIB Software SE (ETR:RIB), which is in the software business, and is based in Germany, received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €24.74 at one point, and dropping to the lows of €18.89. 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 RIB Software’s current trading price of €19.07 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 RIB Software’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 RIB Software
What’s the opportunity in RIB Software?
According to my valuation model, RIB Software seems to be fairly priced at around 12% below my intrinsic value, which means if you buy RIB Software today, you’d be paying a fair price for it. And if you believe that the stock is really worth €21.61, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since RIB Software’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.
What does the future of RIB Software 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. With profit expected to grow by 68% over the next couple of years, the future seems bright for RIB Software. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? RIB’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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?
Are you a potential investor? If you’ve been keeping tabs on RIB, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on RIB Software. You can find everything you need to know about RIB Software in the latest infographic research report. If you are no longer interested in RIB Software, you can use our free platform to see my list of over 50 other stocks with a high growth potential.