What Does Zee Entertainment Enterprises Limited's (NSE:ZEEL) Share Price Indicate?

Zee Entertainment Enterprises Limited (NSE:ZEEL), is not the largest company out there, but it saw significant share price movement during recent months on the NSEI, rising to highs of ₹249 and falling to the lows of ₹201. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Zee Entertainment Enterprises' current trading price of ₹215 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Zee Entertainment Enterprises’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Zee Entertainment Enterprises

Is Zee Entertainment Enterprises still cheap?

Zee Entertainment Enterprises appears to be overvalued by 34% at the moment, based on my discounted cash flow valuation. The stock is currently priced at ₹215 on the market compared to my intrinsic value of ₹160.09. This means that the buying opportunity has probably disappeared for now. Furthermore, Zee Entertainment Enterprises’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from Zee Entertainment Enterprises?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Zee Entertainment Enterprises' revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? ZEEL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe ZEEL should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on ZEEL for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for ZEEL, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Zee Entertainment Enterprises from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Zee Entertainment Enterprises, 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. 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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