At R$13.15, Is It Time To Put Cyrela Commercial Properties S.A. (BVMF:CCPR3) On Your Watch List?

Cyrela Commercial Properties S.A. (BVMF:CCPR3), is not the largest company out there, but it led the BOVESPA gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Cyrela Commercial Properties’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Cyrela Commercial Properties

What is Cyrela Commercial Properties worth?

Cyrela Commercial Properties appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and 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 Cyrela Commercial Properties’s ratio of 47.53x is above its peer average of 24.72x, which suggests the stock is trading at a higher price compared to the Real Estate industry. In addition to this, it seems like Cyrela Commercial Properties’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 Cyrela Commercial Properties 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. 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. In Cyrela Commercial Properties' case, its earnings over the next year are expected to double, indicating an incredibly optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in CCPR3’s positive outlook, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe CCPR3 should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. 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 an eye on CCPR3 for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for CCPR3, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Cyrela Commercial Properties as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Cyrela Commercial Properties has 2 warning signs and it would be unwise to ignore these.

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This article by Simply Wall St is general in nature. 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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