Should You Think About Buying Xueda (Xiamen) Education Technology Group Co., Ltd (SZSE:000526) Now?

Xueda (Xiamen) Education Technology Group Co., Ltd (SZSE:000526), might not be a large cap stock, but it saw a decent share price growth of 13% on the SZSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Xueda (Xiamen) Education Technology Group’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Xueda (Xiamen) Education Technology Group

Is Xueda (Xiamen) Education Technology Group Still Cheap?

Great news for investors – Xueda (Xiamen) Education Technology Group 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 Xueda (Xiamen) Education Technology Group’s ratio of 26.57x is below its peer average of 41.38x, which indicates the stock is trading at a lower price compared to the Consumer Services industry. Another thing to keep in mind is that Xueda (Xiamen) Education Technology Group’s share price is 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 industry peers, 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 Xueda (Xiamen) Education Technology Group 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. Xueda (Xiamen) Education Technology Group's earnings over the next few years are expected to increase by 64%, 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 000526 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive profit 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 price multiple.

Are you a potential investor? If you’ve been keeping an eye on 000526 for a while, now might be the time to make a leap. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 000526. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.

It can be quite valuable to consider what analysts expect for Xueda (Xiamen) Education Technology Group from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Xueda (Xiamen) Education Technology Group, 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.