Stock Analysis

At RM3.75, Is It Time To Put Gamuda Berhad (KLSE:GAMUDA) On Your Watch List?

KLSE:GAMUDA
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While Gamuda Berhad (KLSE:GAMUDA) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the KLSE. 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 examine Gamuda Berhad’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Gamuda Berhad

Is Gamuda Berhad still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.44% above my intrinsic value, which means if you buy Gamuda Berhad today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth MYR3.73, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Gamuda Berhad’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Gamuda Berhad?

earnings-and-revenue-growth
KLSE:GAMUDA Earnings and Revenue Growth April 20th 2022

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 1.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Gamuda Berhad, at least in the short term.

What this means for you:

Are you a shareholder? It seems like the market has already priced in GAMUDA’s future outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on GAMUDA, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

If you'd like to know more about Gamuda Berhad as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Gamuda Berhad you should know about.

If you are no longer interested in Gamuda Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Gamuda Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.