ALSO Holding (SWX:ALSN) Expands Its IoT Reach With Shelly, Is The Stock Undervalued?

Shelly Group SE has entered a pan European partnership with ALSO Holding (SWX:ALSN), adding Shelly’s smart home and smart building portfolio to ALSO’s IoT focused distribution network across Europe.

For investors watching ALSO Holding, the Shelly partnership comes after a mixed run in the stock. The share price is at CHF186.2, with a 90-day share price return of 5.68%, but a year-to-date share price return that has declined 13.6%. The 1-year total shareholder return is down 22.53%, which points to longer-term pressure despite more recent signs of improving momentum.

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ALSO Holding appears to be a solid tech distributor with increasing exposure to smart and IoT solutions, yet the share price has fallen over the past year. Is the current CHF186.2 level a fair deal for that profile?

Price to earnings of 18.7x for ALSO Holding: Is it justified?

ALSO Holding trades on a P/E of 18.7x, which looks modest against both its peers and the wider European electronic industry given current earnings.

The P/E ratio compares the share price to earnings per share and is one of the most common ways investors judge how much they are paying for each unit of profit. For a tech focused distributor like ALSO Holding, this matters because earnings can be influenced by thin margins, working capital swings and exposure to broader ICT demand.

ALSO Holding currently screens as good value on this measure. The SWS DCF model suggests the stock trades about 12.3% below an estimated fair value of CHF212.35, while the current price is CHF186.20. In addition, the company’s P/E of 18.7x is below the European electronic industry average of 20.5x and well below a peer average of 78.7x. The estimated fair P/E of 28x also sits meaningfully higher than where the stock trades today, which signals a level the market could potentially move towards if assumptions behind that fair multiple play out.

This combination of an implied discount to DCF fair value and a market multiple below both industry and fair ratio benchmarks points to investors pricing ALSO Holding’s earnings more cautiously than those peers.

Explore the SWS fair ratio for ALSO Holding

Result: Price-to-earnings of 18.7x (UNDERVALUED)

However, you should weigh the long term share price pressure, including the 5 year total return decline of 28.9%, and the thin net income of €135.4m on €14.7b revenue.

Find out about the key risks to this ALSO Holding narrative.

Another view on ALSO Holding’s value

There is also a discounted cash flow view to consider. The SWS DCF model points to an estimated fair value of CHF212.35 for ALSO Holding compared with the current CHF186.20. That suggests the stock screens as undervalued on this method. Which tool do you trust more for your own process?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ALSO Holding for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 272 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If the mixed signals around ALSO Holding leave you undecided, now is a good time to review the details yourself and form your own view. To see both the potential concerns and the possible upside in one place, take a look at the 4 key rewards and 1 important warning sign.

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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.

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