Should You Investigate Compagnie des Alpes SA (EPA:CDA) At €17.42?

While Compagnie des Alpes SA (EPA:CDA) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the ENXTPA. With many analysts covering the 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? Let’s examine Compagnie des Alpes’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Compagnie des Alpes

Is Compagnie des Alpes still cheap?

Good news, investors! Compagnie des Alpes is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Compagnie des Alpes’s ratio of 9.43x is below its peer average of 16.87x, which indicates the stock is trading at a lower price compared to the Hospitality industry. However, given that Compagnie des Alpes’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Compagnie des Alpes generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted profit growth of 6.6% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Compagnie des Alpes, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since CDA is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. 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 CDA for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CDA. 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 investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Compagnie des Alpes at this point in time. For example - Compagnie des Alpes has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. 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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