Should You Think About Buying EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) Now?

While EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the BOVESPA 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 examine EcoRodovias Infraestrutura e Logística’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for EcoRodovias Infraestrutura e Logística

What is EcoRodovias Infraestrutura e Logística worth?

According to my valuation model, EcoRodovias Infraestrutura e Logística seems to be fairly priced at around 13% below my intrinsic value, which means if you buy EcoRodovias Infraestrutura e Logística today, you’d be paying a fair price for it. And if you believe that the stock is really worth R$13.26, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since EcoRodovias Infraestrutura e Logística’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What kind of growth will EcoRodovias Infraestrutura e Logística generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 41% over the next couple of years, the future seems bright for EcoRodovias Infraestrutura e Logística. 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? ECOR3’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 ECOR3, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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'd like to know more about EcoRodovias Infraestrutura e Logística as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with EcoRodovias Infraestrutura e Logística, and understanding this should be part of your investment process.

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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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