Should you consider buying CR Capital AG (ETR: CRZK) now?
CR Capital AG (ETR: CRZK), may not be a large cap stock, but its share price has risen double-digit by more than 10% in the past two months on XTRA. As a small cap stock, barely covered by analysts, there is usually more opportunity for bad valuation because there is less activity to bring the stock closer to its fair value. Is there still an opportunity here to buy? Let’s take a closer look at CR Capital’s valuation and outlook to determine if there is still an opportunity to trade.
Check out our latest review for CR Capital
What is CR Capital worth?
Great news for investors – CR Capital is still trading fairly low under my multiple pricing model, where I compare the company’s price-to-earnings ratio to the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find CR Capital’s ratio of 1.64x to be lower than its peer average of 14.37x, indicating that the stock is trading at a lower price than the real estate industry. What is more interesting is that the share price of CR Capital is quite stable, which can mean two things: First, the share price may take a while to get closer to its peers in the sector, and secondly, there may be less chance of buying low in the future once it reaches this value. Indeed, the action is less volatile than the market in the broad sense given its low beta.
Can we expect growth from CR Capital?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s also take a look at the future expectations of the business. Although in the case of CR Capital, it is expected to generate relatively unexciting earnings growth of 9.7%, which does not help strengthen its investment thesis. Growth does not appear to be the primary reason for a buying decision for the company, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively subdued, given that CRZK is currently trading below the industry PE ratio, perhaps now is a great time to build up more of your equity holdings. However, there are also other factors such as the capital structure to take into account, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping your eye on CRZK for a while, now might be the time to take a leap. Its future earnings outlook is not yet fully reflected in the current share price, which means it is not too late to buy CRZK. But before making any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.
If you are interested in learning more about CR Capital as a business, it is important to be aware of the risks it faces. For example – CR Capital has 1 warning sign we think you should be aware.
If you are no longer interested in CR Capital, you can use our free platform to view our list of over 50 other high growth potential stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.