Is It Time To Consider Buying CEMEX, S.A.B. de C.V. (BMV:CEMEXCPO)?

CEMEX, S.A.B. de C.V. (BMV:CEMEXCPO), might not be a large cap stock, but it saw a decent share price growth in the teens level on the BMV over the last few months. As a mid-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 take a look at CEMEX. de’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for CEMEX. de

What's The Opportunity In CEMEX. de?

According to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that CEMEX. de’s ratio of 17.8x is above its peer average of 9.78x, which suggests the stock is trading at a higher price compared to the Basic Materials industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since CEMEX. de’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will CEMEX. de 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. CEMEX. de'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? It seems like the market has well and truly priced in CEMEX CPO’s positive outlook, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe CEMEX CPO should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on CEMEX CPO for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for CEMEX CPO, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into CEMEX. de, you'd also look into what risks it is currently facing. For example, CEMEX. de has 2 warning signs (and 1 which can't be ignored) we think you should know about.

If you are no longer interested in CEMEX. de, 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.