Should You Investigate HDC Hyundai Development Company (KRX:294870) At ₩22,450?

While HDC Hyundai Development Company (KRX:294870) might not have the largest market cap around , it saw a significant share price rise of 32% in the past couple of months on the KOSE. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a 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? Today we will analyse the most recent data on HDC Hyundai Development’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for HDC Hyundai Development

Is HDC Hyundai Development Still Cheap?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 7.38x is currently trading slightly below its industry peers’ ratio of 8.39x, which means if you buy HDC Hyundai Development today, you’d be paying a reasonable price for it. And if you believe that HDC Hyundai Development should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. In addition to this, it seems like HDC Hyundai Development’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

What does the future of HDC Hyundai Development 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. HDC Hyundai Development's 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? A294870’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 track record of its management team. Have these factors changed since the last time you looked at A294870? 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 an eye on A294870, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for A294870, 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 3 warning signs for HDC Hyundai Development (of which 1 is a bit concerning!) you should know about.

If you are no longer interested in HDC Hyundai Development, 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.