What Is EcoRodovias Infraestrutura e Logística S.A.'s (BVMF:ECOR3) Share Price Doing?

EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3), might not be a large cap stock, but it led the BOVESPA gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the 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? Today we will analyse the most recent data on EcoRodovias Infraestrutura e Logística’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for EcoRodovias Infraestrutura e Logística

Is EcoRodovias Infraestrutura e Logística Still Cheap?

Great news for investors – EcoRodovias Infraestrutura e Logística is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that EcoRodovias Infraestrutura e Logística’s ratio of 4.2x is below its peer average of 14.99x, which indicates the stock is trading at a lower price compared to the Infrastructure industry. What’s more interesting is that, EcoRodovias Infraestrutura e Logística’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.

What does the future of EcoRodovias Infraestrutura e Logística look like?

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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for EcoRodovias Infraestrutura e Logística, at least in the near future.

What This Means For You

Are you a shareholder? Although ECOR3 is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to ECOR3, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on ECOR3 for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

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. At Simply Wall St, we found 3 warning signs for EcoRodovias Infraestrutura e Logística and we think they deserve your attention.

If you are no longer interested in EcoRodovias Infraestrutura e Logística, 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.