Should You Think About Buying Rede D'Or São Luiz S.A. (BVMF:RDOR3) Now?

Rede D'Or São Luiz S.A. (BVMF:RDOR3) led the BOVESPA gainers with a relatively large price hike in the past couple of weeks. The company is now trading at yearly-high levels following the recent surge in its share price. 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 take a look at Rede D'Or São Luiz’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Rede D'Or São Luiz

Is Rede D'Or São Luiz Still Cheap?

Great news for investors – Rede D'Or São Luiz is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is R$46.47, but it is currently trading at R$33.35 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Rede D'Or São Luiz’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.

Can we expect growth from Rede D'Or São Luiz?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Rede D'Or São Luiz's earnings over the next few years are expected to increase by 73%, 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? Since RDOR3 is currently undervalued, 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on RDOR3 for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RDOR3. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Rede D'Or São Luiz, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.