Is Greek Organization of Football Prognostics SA.'s (ATH:OPAP) Growth Strong Enough To Justify Its April Share Price?

Greek Organization of Football Prognostics SA. (ATSE:OPAP) is a stock well-positioned for future growth, but many investors are wondering whether its last closing price of €9.2 is based on unrealistic expectations. Let’s take a look at some key metrics to determine whether there's any value here for current and potential future investors. Check out our latest analysis for Greek Organization of Football Prognostics

Exciting times ahead?

If you are bullish about Greek Organization of Football Prognostics's growth potential then you are certainly not alone. Expectations from 8 analysts are extremely bullish with earnings forecasted to rise significantly from today's level of €0.397 to €0.773 over the next three years. This results in an annual growth rate of 20.86%, on average, which illustrates a highly optimistic outlook in the near term.

Is OPAP's share price justified by its earnings growth?

As the legendary value investor Ben Graham once said, “Price is what you pay, value is what you get.” Greek Organization of Football Prognostics is trading at price-to-earnings (PE) ratio of 23.17x, which tells us the stock is overvalued based on current earnings compared to the hospitality industry average of 21.7x , and overvalued compared to the GR market average ratio of 15.21x .

We understand OPAP seems to be overvalued based on its current earnings, compared to its industry peers. But, seeing as Greek Organization of Football Prognostics is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 23.17x and expected year-on-year earnings growth of 20.86% give Greek Organization of Football Prognostics an acceptable PEG ratio of 1.11x. This means that, when we account for Greek Organization of Football Prognostics's growth, the stock can be viewed as slightly overvalued , based on fundamental analysis.

What this means for you:

OPAP's current overvaluation could signal a potential selling opportunity to reduce your exposure to the stock, or it you're a potential investor, now may not be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

1. Financial Health: Is OPAP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Past Track Record: Has OPAP been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of OPAP's historicals for more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.