Today we're going to take a look at the well-established Geberit AG (VTX:GEBN). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the SWX. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the large-cap 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 examine Geberit’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Geberit

What's The Opportunity In Geberit?

According to our valuation model, the stock is currently overvalued by about 25%, trading at CHF499 compared to our intrinsic value of CHF400.14. Not the best news for investors looking to buy! In addition to this, it seems like Geberit’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Geberit look like?

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. However, with a negative profit growth of -0.002% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Geberit. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? If you believe GEBN 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. Given the risk from a negative growth outlook, 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 tabs on GEBN for some time, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. Its price has risen beyond its true value, on top of a negative 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?