Is Enel Américas S.A. (SNSE:ENELAM) Potentially Undervalued?

Enel Américas S.A. (SNSE:ENELAM) saw a double-digit share price rise of over 10% in the past couple of months on the SNSE. With many analysts covering the large-cap 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 I will analyse the most recent data on Enel Américas’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Enel Américas

Is Enel Américas still cheap?

Great news for investors – Enel Américas is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is CLP169.92, but it is currently trading at CL$103 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Enel Américas’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Enel Américas generate?

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. Enel Américas' earnings over the next few years are expected to increase by 78%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since ENELAM is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ENELAM for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ENELAM. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

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

If you are no longer interested in Enel Américas, 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.