Prosus (ENXTAM:PRX): Reassessing Valuation After Strong Half-Year Earnings Jump in Sales and Net Income

Prosus (ENXTAM:PRX) just paired a strong earnings beat with a big capital return story, as half year sales and net income jumped sharply, which puts the recent share price pullback into a different light.

See our latest analysis for Prosus.

Even after a 13.05% 1 month share price pullback and a softer 7 day move, Prosus still boasts a hefty 34.55% year to date share price return and a 77.31% three year total shareholder return, suggesting longer term momentum remains firmly intact.

If Prosus impressive run has you rethinking what else might be compounding in the background, now is a good time to explore fast growing stocks with high insider ownership.

With earnings surging, a chunky discount to analyst targets, and billions still flowing back via buybacks, is Prosus stock quietly undervalued today, or are markets already pricing in the next leg of growth?

Most Popular Narrative: 17.9% Undervalued

With Prosus last closing at €51.95 against a narrative fair value of €63.25, the latest consensus frames the pullback as a potential mispricing.

The analysts have a consensus price target of €60.525 for Prosus based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €70.0, and the most bearish reporting a price target of just €45.0.

Read the complete narrative.

Want to see what kind of revenue engine and profit margins could justify this gap, plus the punchy future earnings multiple baked in? The full narrative unpacks the specific growth path, buyback assumptions and valuation leap the Street is willing to underwrite, and which numbers really have to land for that fair value to hold.

Result: Fair Value of $63.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on execution, and missteps in ecosystem integration or underwhelming returns from AI driven investments could quickly challenge that upside case.

Find out about the key risks to this Prosus narrative.

Another View: Our DCF Model Sees Less Upside

While the narrative fair value suggests Prosus is 17.9% undervalued, our DCF model is more cautious, with a fair value of €35.60 versus the current €51.95, implying the shares look overvalued on cash flow assumptions. Is sentiment running ahead of fundamentals, or are the cash flow inputs too conservative?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Prosus for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 912 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Prosus Narrative

If you would rather examine the numbers yourself and challenge these assumptions, you can build a personalised Prosus thesis in just minutes: Do it your way.

A great starting point for your Prosus research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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