Stock Analysis

What Is Gamuda Berhad's (KLSE:GAMUDA) Share Price Doing?

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 double-digit share price rise of over 10% in the past couple of months on the KLSE. 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 take a look at Gamuda Berhad’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Gamuda Berhad

What is Gamuda Berhad worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15% below my intrinsic value, which means if you buy Gamuda Berhad today, you’d be paying a fair price for it. And if you believe that the stock is really worth MYR4.57, then there’s not much of an upside to gain from mispricing. In addition to this, Gamuda Berhad has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Gamuda Berhad generate?

earnings-and-revenue-growth
KLSE:GAMUDA Earnings and Revenue Growth January 3rd 2021

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 more than double over the next couple of years, the future seems bright for Gamuda Berhad. 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? GAMUDA’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

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

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've found that Gamuda Berhad has 3 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

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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. 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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