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Compagnie Plastic Omnium SA (EPA:POM), which is in the auto components business, and is based in France, received a lot of attention from a substantial price increase on the ENXTPA over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Compagnie Plastic Omnium’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Compagnie Plastic Omnium

Is Compagnie Plastic Omnium still cheap?

The stock is currently trading at €24.56 on the share market, which means it is overvalued by 42.69% compared to my intrinsic value of €17.21. This means that the opportunity to buy Compagnie Plastic Omnium at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Compagnie Plastic Omnium’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.

Can we expect growth from Compagnie Plastic Omnium?

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. However, with a negative profit growth of -7.9% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Compagnie Plastic Omnium. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? If you believe POM is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to de-risk your portfolio. 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 an eye on POM for a while, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Compagnie Plastic Omnium. You can find everything you need to know about Compagnie Plastic Omnium in the latest infographic research report. If you are no longer interested in Compagnie Plastic Omnium, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.