Assessing Andlauer Healthcare Group (TSX:AND) Valuation After Steady Share Price Gains in 2024

Andlauer Healthcare Group (TSX:AND) stock has quietly moved higher this week, with shares up 2% over the past seven days. Investors may be watching for signals in the stock’s recent price action as well as its steady year-to-date gains.

See our latest analysis for Andlauer Healthcare Group.

Andlauer Healthcare Group’s recent upward move caps off a robust stretch, with a 21.5% year-to-date share price return and a healthy 1-year total shareholder return of nearly 33%. This steady climb suggests momentum is building as investors recognize the company’s resilience and long-term growth potential.

If Andlauer’s progress has you thinking about what else might be on the rise in the sector, explore more names on our See the full list for free.

But with Andlauer Healthcare shares trading close to analyst price targets and recent gains already strong, should investors see value at current levels? Or has the market already priced in all the company’s future growth?

Price-to-Earnings of 30.8x: Is it justified?

Andlauer Healthcare Group trades at a price-to-earnings (P/E) ratio of 30.8x, which is a key starting point to assess how the market values its shares relative to profits. At the last close of CA$53.18, this multiple suggests investors are paying a premium to own the company’s earnings. How does this compare to peers?

The price-to-earnings ratio measures how much investors are willing to pay for each dollar of a company’s earnings. A higher multiple can signal strong confidence in future growth or a business with a resilient model. A lower number might reflect concerns around sustainability of those profits or lower growth expectations. For Andlauer, a 30.8x ratio positions it as a premium play within the sector.

Compared to the peer group, Andlauer’s price-to-earnings ratio is attractive. It trades well below the peer average of 81.3x, suggesting shares may be relatively undervalued compared to direct competitors. However, looking across the North American Healthcare industry more broadly, its P/E is somewhat expensive, as the sector average stands at 21.3x. This creates a split narrative: the company is inexpensive against local rivals, but looks expensive versus the wider industry norm. There is no available fair ratio estimate at this time to provide further context on how far the current multiple could move toward a fair value level.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 30.8x (ABOUT RIGHT)

However, slower revenue growth and shares trading near price targets could pose risks. This may potentially limit further upside if market sentiment shifts.

Find out about the key risks to this Andlauer Healthcare Group narrative.

Another View: Discounted Cash Flow Signals Deep Value

While the market’s focus is often on earnings multiples, a second approach using the SWS DCF model offers a very different perspective. This model estimates Andlauer Healthcare Group’s fair value at CA$97.43 per share, which is substantially higher than its recent price. Does this signal a hidden opportunity for patient investors?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Andlauer Healthcare Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Andlauer Healthcare Group Narrative

If you want to dig deeper or take a different view, you can easily shape your own analysis in under three minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Andlauer Healthcare Group.

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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.

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