At د.إ4.29, Is It Time To Put Emaar Development PJSC (DFM:EMAARDEV) On Your Watch List?

Emaar Development PJSC (DFM:EMAARDEV), might not be a large cap stock, but it saw a decent share price growth in the teens level on the DFM 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. However, could the stock still be trading at a relatively cheap price? Let’s examine Emaar Development PJSC’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Emaar Development PJSC

Is Emaar Development PJSC still cheap?

Good news, investors! Emaar Development PJSC is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Emaar Development PJSC’s ratio of 8.04x is below its peer average of 13.95x, which indicates the stock is trading at a lower price compared to the Real Estate industry. However, given that Emaar Development PJSC’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Emaar Development PJSC 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. With profit expected to grow by a double-digit 19% over the next couple of years, the outlook is positive for Emaar Development PJSC. 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 EMAARDEV is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on EMAARDEV for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EMAARDEV. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you'd like to know more about Emaar Development PJSC as a business, it's important to be aware of any risks it's facing. For instance, we've identified 2 warning signs for Emaar Development PJSC (1 is a bit unpleasant) you should be familiar with.

If you are no longer interested in Emaar Development PJSC, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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