Is Now The Time To Look At Buying NAVER Corporation (KRX:035420)?

Today we're going to take a look at the well-established NAVER Corporation (KRX:035420). The company's stock saw a significant share price rise of 22% 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. With many analysts covering the large-cap 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 examine NAVER’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for NAVER

What Is NAVER 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. 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 18.38x is currently trading slightly below its industry peers’ ratio of 22.01x, which means if you buy NAVER today, you’d be paying a reasonable price for it. And if you believe that NAVER 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 NAVER’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 kind of growth will NAVER 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. With profit expected to grow by 32% over the next couple of years, the future seems bright for NAVER. 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? It seems like the market has already priced in A035420’s positive outlook, 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 A035420? 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 A035420, 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 A035420, 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.

It can be quite valuable to consider what analysts expect for NAVER from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in NAVER, 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.