What Does Carl Zeiss Meditec AG's (ETR:AFX) Share Price Indicate?

Carl Zeiss Meditec AG (ETR:AFX), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €122 at one point, and dropping to the lows of €96.55. 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 Carl Zeiss Meditec's current trading price of €97.70 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 Carl Zeiss Meditec’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 Carl Zeiss Meditec

Is Carl Zeiss Meditec Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.4% below our intrinsic value, which means if you buy Carl Zeiss Meditec today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €106.72, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Carl Zeiss Meditec’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Carl Zeiss Meditec?

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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. With profit expected to grow by 39% over the next couple of years, the future seems bright for Carl Zeiss Meditec. 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? It seems like the market has already priced in AFX’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on AFX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Carl Zeiss Meditec, 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.