Does Cowell e Holdings Inc.'s (HKG:1415) Stock Price Account For Its Growth?

Cowell e Holdings Inc. (HKG:1415) is considered a high growth stock. However its last closing price of HK$0.89 left investors wondering whether this growth has already been factored into the share price. Let’s look into this by assessing 1415's expected growth over the next few years.

See our latest analysis for Cowell e Holdings

Has the 1415 train has slowed down?

According to the analysts covering the company, the following few years should bring about good growth prospects for Cowell e Holdings. Expectations from 3 analysts are certainly positive with earnings per share estimated to rise from today's level of $0.0192 to $0.0355 over the next three years. This results in an annual growth rate of 13%, on average, which indicates a solid future in the near term.

Is 1415 available at a good price after accounting for its growth?

Stocks like Cowell e Holdings, with a price-to-earnings (P/E) ratio of 5.92x, always catch the eye of investors on the hunt for a bargain. In isolation, this metric can be a bit too simplistic but in comparison to benchmarks, it tells us that 1415 is undervalued relative to the current HK market average of 10.22x , and undervalued based on its latest annual earnings update compared to the Electronic average of 7.83x .

Cowell e Holdings's price-to-earnings ratio stands at 5.92x, which is low, relative to the industry average. This already suggests that the stock could be undervalued. But, since Cowell e Holdings is a high-growth stock, we must also account for its earnings growth by using calculation called the PEG ratio. A PE ratio of 5.92x and expected year-on-year earnings growth of 13% give Cowell e Holdings an extremely low PEG ratio of 0.46x. This tells us that when we include its growth in our analysis Cowell e Holdings's stock can be considered relatively cheap , based on fundamental analysis.

What this means for you:

1415's current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you're a potential investor, now may 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 highly recommend you to complete your research by taking a look at the following:

1. Financial Health: Are 1415’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 1415 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 1415'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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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.