Is It Too Late To Consider Buying Brigade Enterprises Limited (NSE:BRIGADE)?

While Brigade Enterprises Limited (NSE:BRIGADE) might not be the most widely known stock at the moment, it led the NSEI gainers with a relatively large price hike in the past couple of weeks. 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 Brigade Enterprises’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Brigade Enterprises

Is Brigade Enterprises Still Cheap?

Brigade Enterprises appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Brigade Enterprises’s ratio of 57.01x is above its peer average of 26.84x, which suggests the stock is trading at a higher price compared to the Real Estate industry. In addition to this, it seems like Brigade Enterprises’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Brigade Enterprises generate?

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. 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. Brigade Enterprises' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? BRIGADE’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe BRIGADE should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 BRIGADE for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for BRIGADE, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Brigade Enterprises, you'd also look into what risks it is currently facing. To that end, you should learn about the 2 warning signs we've spotted with Brigade Enterprises (including 1 which makes us a bit uncomfortable).

If you are no longer interested in Brigade 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. 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.