What does the adidas AG (ETR:ADS) stock price indicate?


adidas AG (ETR:ADS) led the XTRA winners with a relatively large price increase over the past two weeks. With many analysts covering large-cap stocks, we can expect any price-sensitive announcements to have already factored into the stock price. But what if there is still an opportunity to buy? Let’s take a closer look at adidas’ valuation and outlook to see if there’s still a bargain opportunity.

Check out our latest analysis for adidas

Is Adidas still cheap?

Good news for investors – adidas is still trading at a fairly cheap price. My valuation model shows that the intrinsic value of the stock is €293.84, which is higher than what the market currently values ​​for the company. This indicates a potential opportunity to buy low. What’s more interesting is that adidas’ share price is theoretically quite stable, which could mean two things: first, it may take some time for the share price to reach its value intrinsic, and second, there may be less chance of buying low in the future once it reaches that value. This is because the stock is less volatile than the broader market given its low beta.

What does the future of adidas look like?

XTRA: ADS Earnings and Revenue Growth March 29, 2022

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profits expected to increase by 68% over the next two years, the future looks bright for adidas. It seems that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.

What does this mean to you :

Are you a shareholder? Given that the ADS is currently undervalued, now may be the perfect time to accumulate more of your equity holdings. With a positive outlook on the horizon, it appears that this growth has yet to be fully priced into the stock price. However, other factors such as capital structure must also be taken into account, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping your eye on ADS for a while, it might be time to get into the stock. Its dynamic future outlook is not yet fully reflected in the current share price, which means it is not too late to buy ADS. But before making investment decisions, consider other factors such as the track record of its management team, so you can make an informed purchase.

Keep in mind that when it comes to analyzing a stock, the risks involved should be noted. For example, we found 1 warning sign which you should take a look to get a better picture of adidas.

If you’re no longer interested in adidas, you can use our free platform to view our list of over 50 other stocks with high growth potential.

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 be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.


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