What Does Astro Malaysia Holdings Berhad's (KLSE:ASTRO) Share Price Indicate?

While Astro Malaysia Holdings Berhad (KLSE:ASTRO) 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 stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Astro Malaysia Holdings Berhad’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Astro Malaysia Holdings Berhad

What's The Opportunity In Astro Malaysia Holdings Berhad?

The share price seems sensible at the moment according to my price multiple model, where I compare 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 Astro Malaysia Holdings Berhad’s ratio of 8.89x is trading slightly above its industry peers’ ratio of 8.55x, which means if you buy Astro Malaysia Holdings Berhad today, you’d be paying a relatively sensible price for it. And if you believe Astro Malaysia Holdings Berhad should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. In addition to this, it seems like Astro Malaysia Holdings Berhad’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Astro Malaysia Holdings Berhad 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 a relatively muted profit growth of 4.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Astro Malaysia Holdings 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 ASTRO’s growth outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at ASTRO? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on ASTRO, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean 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 Astro Malaysia Holdings Berhad, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 2 warning signs for Astro Malaysia Holdings Berhad and you'll want to know about these.

If you are no longer interested in Astro Malaysia Holdings Berhad, 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.