Is Grupo Televisa, S.A.B. (BMV:TLEVISACPO) Potentially Undervalued?

While Grupo Televisa, S.A.B. (BMV:TLEVISACPO) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the BMV over the last few months, increasing to Mex$11.11 at one point, and dropping to the lows of Mex$7.14. 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 Grupo Televisa's current trading price of Mex$7.14 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 Grupo Televisa’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Grupo Televisa

What Is Grupo Televisa Worth?

According to our valuation model, Grupo Televisa seems to be fairly priced at around 16% below our intrinsic value, which means if you buy Grupo Televisa today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth MX$8.54, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Grupo Televisa’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 Grupo Televisa generate?

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 an expected decline of -9.7% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Grupo Televisa. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? TLEVISA CPO seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on TLEVISA CPO for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on TLEVISA CPO should the price fluctuate below its true value.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. When we did our research, we found 2 warning signs for Grupo Televisa (1 is a bit unpleasant!) that we believe deserve your full attention.

If you are no longer interested in Grupo Televisa, 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.