Is El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1) Potentially Undervalued?

El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the BMV over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine El Puerto de Liverpool. de’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for El Puerto de Liverpool. de

What is El Puerto de Liverpool. de worth?

Good news, investors! El Puerto de Liverpool. de is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. 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 El Puerto de Liverpool. de’s ratio of 26.36x is below its peer average of 49.18x, which indicates the stock is trading at a lower price compared to the Multiline Retail industry. Another thing to keep in mind is that El Puerto de Liverpool. de’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from El Puerto de Liverpool. de?

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. El Puerto de Liverpool. 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? Since LIVEPOL C-1 is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 LIVEPOL C-1 for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LIVEPOL C-1. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 2 warning signs for El Puerto de Liverpool. de (1 doesn't sit too well with us) you should be familiar with.

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This article by Simply Wall St is general in nature. 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.
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