Should You Investigate Event Hospitality & Entertainment Limited (ASX:EVT) At AU$15.30?

By
Simply Wall St
Published
February 21, 2022
ASX:EVT
Source: Shutterstock

While Event Hospitality & Entertainment Limited (ASX:EVT) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the ASX over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Event Hospitality & Entertainment’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Event Hospitality & Entertainment

What is Event Hospitality & Entertainment worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.3% below my intrinsic value, which means if you buy Event Hospitality & Entertainment today, you’d be paying a fair price for it. And if you believe that the stock is really worth A$16.15, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Event Hospitality & Entertainment’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Event Hospitality & Entertainment?

earnings-and-revenue-growth
ASX:EVT Earnings and Revenue Growth February 21st 2022

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 revenue expected to more than double in the next few years, the future appears to be extremely bright for Event Hospitality & Entertainment. If expenses can also be maintained, 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? EVT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on EVT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Event Hospitality & Entertainment, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Event Hospitality & Entertainment has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Event Hospitality & Entertainment, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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