Should You Think About Buying Koninklijke Heijmans N.V. (AMS:HEIJM) Now?

Koninklijke Heijmans N.V. (AMS:HEIJM), is not the largest company out there, but it received a lot of attention from a substantial price increase on the ENXTAM over the last few months. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. As a €1.7b market-cap stock, it seems odd Koninklijke Heijmans is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today we will analyse the most recent data on Koninklijke Heijmans’s outlook and valuation to see if the opportunity still exists.

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Is Koninklijke Heijmans Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 15.52x is currently trading slightly above its industry peers’ ratio of 14.63x, which means if you buy Koninklijke Heijmans today, you’d be paying a relatively sensible price for it. And if you believe that Koninklijke Heijmans should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Is there another opportunity to buy low in the future? Since Koninklijke Heijmans’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

Check out our latest analysis for Koninklijke Heijmans

Can we expect growth from Koninklijke Heijmans?

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. Koninklijke Heijmans' earnings over the next few years are expected to increase by 41%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in HEIJM’s positive outlook, with shares trading around industry price multiples. 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 HEIJM? 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 HEIJM, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for HEIJM, 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.

It can be quite valuable to consider what analysts expect for Koninklijke Heijmans from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Koninklijke Heijmans, 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.