ecotel communication ag (ETR:E4C), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €17.90 at one point, and dropping to the lows of €15.40. 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 ecotel communication ag's current trading price of €16.50 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 ecotel communication ag’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for ecotel communication ag

Is ecotel communication ag Still Cheap?

Great news for investors – ecotel communication ag is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 13.61x is currently well-below the industry average of 25.56x, meaning that it is trading at a cheaper price relative to its peers. ecotel communication ag’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of ecotel communication ag look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 50% over the next couple of years, the future seems bright for ecotel communication ag. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since E4C is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.