At CL$952, Is It Time To Put Plaza S.A. (SNSE:MALLPLAZA) On Your Watch List?

Plaza S.A. (SNSE:MALLPLAZA), is not the largest company out there, but it received a lot of attention from a substantial price increase on the SNSE over the last few months. With many analysts covering the mid-cap 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 Plaza’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Plaza

What Is Plaza Worth?

According to my valuation model, Plaza seems to be fairly priced at around 6.9% below my intrinsic value, which means if you buy Plaza today, you’d be paying a fair price for it. And if you believe the company’s true value is CLP1023.03, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Plaza has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Plaza generate?

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. Plaza's earnings over the next few years are expected to double, indicating a very 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? MALLPLAZA’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 an eye on MALLPLAZA, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Plaza.

If you are no longer interested in Plaza, 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.