Why Prosegur Compañía de Seguridad, S.A. (BME:PSG) Could Be Worth Watching

While Prosegur Compañía de Seguridad, S.A. (BME:PSG) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the BME over the last few months, increasing to €2.97 at one point, and dropping to the lows of €2.48. 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 Prosegur Compañía de Seguridad's current trading price of €2.62 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 Prosegur Compañía de Seguridad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is Prosegur Compañía de Seguridad Worth?

According to our valuation model, the stock is currently overvalued by about 26%, trading at €2.62 compared to our intrinsic value of €2.07. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Prosegur Compañía de Seguridad’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

View our latest analysis for Prosegur Compañía de Seguridad

What does the future of Prosegur Compañía de Seguridad look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Prosegur Compañía de Seguridad's earnings over the next few years are expected to increase by 46%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? PSG’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe PSG should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on PSG for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for PSG, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Prosegur Compañía de Seguridad as a business, it's important to be aware of any risks it's facing. For example, Prosegur Compañía de Seguridad has 2 warning signs (and 1 which is concerning) we think you should know about.

If you are no longer interested in Prosegur Compañía de Seguridad, 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.