Why Fundamental Investors Might Love Klassik Radio AG (ETR:KA8)

Simply Wall St

Klassik Radio AG (ETR:KA8) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of KA8, it is a company with impressive financial health as well as a excellent growth outlook. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Klassik Radio here.

Excellent balance sheet with reasonable growth potential

KA8 is an attractive stock for growth-seeking investors, with an expected earnings growth of 27% in the upcoming year, made up of high-quality, operational cash from its core business, which is expected to more than double over the next year. This indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. KA8’s debt-to-equity ratio stands at 4.8%, which means its debt level is relatively low. This means the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future. KA8's has produced operating cash levels of 2.02x total debt over the past year, which implies that KA8's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

XTRA:KA8 Past and Future Earnings, April 23rd 2019

Next Steps:

For Klassik Radio, I've compiled three pertinent factors you should further research:

  1. Historical Performance: What has KA8's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Valuation: What is KA8 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether KA8 is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KA8? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.