Is Royal Boskalis Westminster N.V. (AMS:BOKA) Potentially Undervalued?

Royal Boskalis Westminster N.V. (AMS:BOKA), is not the largest company out there, but it saw significant share price movement during recent months on the ENXTAM, rising to highs of €27.18 and falling to the lows of €23.84. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Royal Boskalis Westminster's current trading price of €25.04 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Royal Boskalis Westminster’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Royal Boskalis Westminster

Is Royal Boskalis Westminster still cheap?

Royal Boskalis Westminster appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and 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 Royal Boskalis Westminster’s ratio of 44.87x is above its peer average of 21.59x, which suggests the stock is trading at a higher price compared to the Construction industry. But, is there another opportunity to buy low in the future? Since Royal Boskalis Westminster’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Royal Boskalis Westminster?

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. Royal Boskalis Westminster'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? BOKA’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 BOKA 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 BOKA 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 optimistic prospect is encouraging for BOKA, 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 Royal Boskalis Westminster as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Royal Boskalis Westminster has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Royal Boskalis Westminster, 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.