JOST Werke SE (ETR:JST), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the XTRA. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at JOST Werke’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for JOST Werke

Is JOST Werke Still Cheap?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that JOST Werke’s ratio of 15.32x is trading slightly above its industry peers’ ratio of 14.86x, which means if you buy JOST Werke today, you’d be paying a relatively reasonable price for it. And if you believe that JOST Werke should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Is there another opportunity to buy low in the future? Since JOST Werke’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What kind of growth will JOST Werke generate?

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. 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. JOST Werke's earnings over the next few years are expected to increase by 60%, 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? JST’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at JST? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?