A Fresh Look at HBX Group International (BME:HBX) Valuation After Recent Share Price Volatility

HBX Group International (BME:HBX) has caught the eye of some investors recently, as its stock performance shows swings across different timeframes. With shares last closing at €7.27, there are a few trends worth exploring.

See our latest analysis for HBX Group International.

Though HBX Group International’s share price has edged lower in recent months, the broader context reveals a stock that is still searching for momentum after a subdued start to the year. Investors seem to be weighing the company’s growth story against shifting perceptions of risk and current valuation.

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So with shares still trading well below analyst targets despite recent declines, is the current level a compelling entry point for value seekers? Or does the market already account for all of HBX's future growth prospects?

Price-to-Sales of 2.5x: Is it justified?

At the last close, HBX Group International trades at a price-to-sales (P/S) ratio of 2.5x, while peers in the sector average 5.9x. This headline figure looks attractive, suggesting the stock might be cheaper than the competition, at least on a revenue multiple basis.

The price-to-sales ratio divides the company’s market value by its revenue, offering a measure of how much investors are paying for each euro of sales. This is especially useful for unprofitable firms like HBX, where earnings-based ratios can mislead. A low P/S ratio compared with competitors can signal undervaluation, but only if growth prospects and business quality are not lagging.

However, while HBX’s 2.5x multiple undercuts its peers, the company is currently unprofitable and navigating through recent volatility. The market might be pricing in operational risks, leadership changes, or doubts about the company’s path to sustained growth.

Looking at the wider industry, HBX’s multiple appears high relative to the European Hospitality sector, where the average P/S is only 1.3x. Compared to the fair value regression ratio of 2x, HBX also looks a little expensive. This suggests that, despite looking better than some direct peers, the broader market may be less willing to pay a premium unless fundamentals improve.

Explore the SWS fair ratio for HBX Group International

Result: Price-to-Sales of 2.5x (ABOUT RIGHT)

However, recent net losses and ongoing volatility could challenge HBX's current valuation if fundamentals do not show sustained improvement soon.

Find out about the key risks to this HBX Group International narrative.

Another Perspective: DCF Model Points to Undervaluation

While the price-to-sales ratio suggests HBX Group International is trading around fair value compared to peers, our DCF model paints a very different picture. According to the SWS DCF model, HBX is trading over 60% below its estimated fair value. This stark gap hints at a possible opportunity, but can discounted cash flow projections be trusted more than market sentiment?

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 HBX Group International 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 HBX Group International Narrative

If you see things differently or want to dig into the numbers yourself, you can easily build your own perspective on HBX Group International in just a few minutes. Do it your way.

A great starting point for your HBX Group International research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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