What Is JK Tyre & Industries Limited's (NSE:JKTYRE) Share Price Doing?

JK Tyre & Industries Limited (NSE:JKTYRE), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NSEI over the last few months. 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 take a look at JK Tyre & Industries’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out the opportunities and risks within the IN Auto Components industry.

What Is JK Tyre & Industries Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.71% above my intrinsic value, which means if you buy JK Tyre & Industries today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ₹167.97, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since JK Tyre & Industries’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will JK Tyre & Industries 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. In the upcoming year, JK Tyre & Industries' earnings are expected to increase by 54%, 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? It seems like the market has already priced in JKTYRE’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on JKTYRE, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into JK Tyre & Industries, you'd also look into what risks it is currently facing. For instance, we've identified 4 warning signs for JK Tyre & Industries (1 is potentially serious) you should be familiar with.

If you are no longer interested in JK Tyre & Industries, 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.