Is AMOREPACIFIC Group (KRX:002790) Potentially Undervalued?

AMOREPACIFIC Group (KRX:002790), is not the largest company out there, but it saw significant share price movement during recent months on the KOSE, rising to highs of ₩32,250 and falling to the lows of ₩22,300. 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 AMOREPACIFIC Group's current trading price of ₩22,400 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at AMOREPACIFIC Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for AMOREPACIFIC Group

What Is AMOREPACIFIC Group Worth?

Great news for investors – AMOREPACIFIC Group is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. 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 7.89x is currently well-below the industry average of 19.49x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because AMOREPACIFIC Group’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.

What does the future of AMOREPACIFIC Group 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. However, with a relatively muted profit growth of 7.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for AMOREPACIFIC Group, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since A002790 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on A002790 for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy A002790. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you want to dive deeper into AMOREPACIFIC Group, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for AMOREPACIFIC Group and you'll want to know about this.

If you are no longer interested in AMOREPACIFIC Group, 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.