At ₩73,700, Is It Time To Put HD Hyundai Construction Equipment Co., LTD. (KRX:267270) On Your Watch List?

HD Hyundai Construction Equipment Co., LTD. (KRX:267270), might not be a large cap stock, but it led the KOSE gainers with a relatively large price hike in the past couple of weeks. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine HD Hyundai Construction Equipment’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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What Is HD Hyundai Construction Equipment Worth?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that HD Hyundai Construction Equipment’s ratio of 13.02x is trading slightly below its industry peers’ ratio of 15.49x, which means if you buy HD Hyundai Construction Equipment today, you’d be paying a decent price for it. And if you believe HD Hyundai Construction Equipment should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because HD Hyundai Construction Equipment’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Check out our latest analysis for HD Hyundai Construction Equipment

What kind of growth will HD Hyundai Construction Equipment 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. 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. HD Hyundai Construction Equipment's earnings over the next few years are expected to increase by 82%, 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? A267270’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 A267270? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on A267270, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for A267270, 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 HD Hyundai Construction Equipment, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of HD Hyundai Construction Equipment.

If you are no longer interested in HD Hyundai Construction Equipment, 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.