Is Now The Time To Look At Buying Lemon Tree Hotels Limited (NSE:LEMONTREE)?

Lemon Tree Hotels Limited (NSE:LEMONTREE), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the NSEI. 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 Lemon Tree Hotels’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Lemon Tree Hotels

What is Lemon Tree Hotels worth?

Great news for investors – Lemon Tree Hotels is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is ₹88.11, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Lemon Tree Hotels’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 does the future of Lemon Tree Hotels look like?

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 Lemon Tree Hotels' case, its revenues over the next couple of years are expected to double, indicating an incredibly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since LEMONTREE is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on LEMONTREE for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LEMONTREE. 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.

It can be quite valuable to consider what analysts expect for Lemon Tree Hotels from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Lemon Tree Hotels, 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.