Is Now The Time To Look At Buying Eco World Development Group Berhad (KLSE:ECOWLD)?

While Eco World Development Group Berhad (KLSE:ECOWLD) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the KLSE. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Eco World Development Group Berhad’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Eco World Development Group Berhad

Is Eco World Development Group Berhad Still Cheap?

Eco World Development Group Berhad is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Eco World Development Group Berhad’s ratio of 23.67x is above its peer average of 16.36x, which suggests the stock is trading at a higher price compared to the Real Estate industry. Furthermore, Eco World Development Group Berhad’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach levels around its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Eco World Development Group Berhad generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 55% over the next couple of years, the future seems bright for Eco World Development Group 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? ECOWLD’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe ECOWLD should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on ECOWLD for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for ECOWLD, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Eco World Development Group Berhad as a business, it's important to be aware of any risks it's facing. For example - Eco World Development Group Berhad has 2 warning signs we think you should be aware of.

If you are no longer interested in Eco World Development Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com