Should You Investigate InterGlobe Aviation Limited (NSE:INDIGO) At ₹5,322?

Today we're going to take a look at the well-established InterGlobe Aviation Limited (NSE:INDIGO). The company's stock received a lot of attention from a substantial price increase on the NSEI over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine InterGlobe Aviation’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Our free stock report includes 1 warning sign investors should be aware of before investing in InterGlobe Aviation. Read for free now.

Is InterGlobe Aviation Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 14% below our intrinsic value, which means if you buy InterGlobe Aviation today, you’d be paying a fair price for it. And if you believe the company’s true value is ₹6196.53, then there’s not much of an upside to gain from mispricing. In addition to this, InterGlobe Aviation has a low beta, which suggests its share price is less volatile than the wider market.

View our latest analysis for InterGlobe Aviation

What kind of growth will InterGlobe Aviation generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 33% over the next couple of years, the future seems bright for InterGlobe Aviation. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? INDIGO’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

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

So while earnings quality is important, it's equally important to consider the risks facing InterGlobe Aviation at this point in time. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of InterGlobe Aviation.

If you are no longer interested in InterGlobe Aviation, 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.