Prosus (ENXTAM:PRX) Valuation in Focus After Launch of Brazilian BDR Programme and Renewed Tencent Optimism

The launch of Prosus (ENXTAM:PRX)'s Brazilian Depositary Receipts programme stands out as a strategic move to broaden its global investor base and strengthen connections in the Brazilian market. This initiative also arrives at a time when optimism around Tencent and Asian markets is giving Prosus shares an additional boost.

See our latest analysis for Prosus.

Prosus’s latest moves, from launching its new Brazilian Depositary Receipts to deepening ties with early-stage startups in India, have landed during a period of impressive momentum. The stock’s price has surged nearly 60% so far this year, with a three-year total shareholder return of 186%. Recent upbeat sentiment around Tencent and a string of capital repayments and dividend actions continue to fuel investor confidence, pointing to lasting growth potential as Prosus expands its global reach.

If the global angle of Prosus’s story has you thinking broader, this is a perfect moment to discover fast growing stocks with high insider ownership.

With Prosus’s shares already rallying this year, the central question remains: are investors looking at an undervalued opportunity, or is the excitement around future growth already fully reflected in the current price?

Most Popular Narrative: 2.8% Undervalued

Analyst consensus points to Prosus trading at a modest discount to its latest fair value estimate, with the most widely followed narrative putting fair value at €63.25 compared to a last close of €61.46. This sets the stage for a debate about whether the market is fully recognizing Prosus’s operational and investment strengths, or if there is still room for a rerating.

"Prosus is focusing on leveraging its ecosystem to improve the performance of its companies by sharing best practices and innovating rapidly, which could lead to better revenue and net margins as companies operate more efficiently and effectively. The company is increasingly investing in AI to improve operational efficiencies, reduce customer acquisition costs, and fight fraud, which should enhance profitability and potentially expand net margins over time."

Read the complete narrative.

Want to know which growth ingredient underpins this bullish view? The narrative hinges on game-changing margin targets and bold revenue forecasts that could surprise even seasoned investors. Intrigued by what’s driving these optimistic projections? The full breakdown reveals the numbers behind the confidence.

Result: Fair Value of €63.25 (UNDERVALUED)

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

However, risks remain, including the possibility that Prosus's ecosystem strategy does not deliver expected efficiencies or that key strategic investments underperform.

Find out about the key risks to this Prosus narrative.

Another View: Our DCF Model Suggests Overvaluation

While analysts believe Prosus is modestly undervalued, our SWS DCF model paints a different picture. According to our DCF, Prosus’s current share price of €61.46 stands well above our fair value estimate of €32.69. This suggests the shares might be overvalued. Could this signal investors are too optimistic, or is there something the model is missing?

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 853 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 have a different perspective or like to dig into the numbers on your own, it's easy to create a personal view in just minutes using Do it your way.

A great starting point for your Prosus research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Why limit yourself to just one stock? Take the next step to find powerful opportunities that fit your goals and give your portfolio an edge.

• Tap into companies with strong cash flow stories by using these 853 undervalued stocks based on cash flows and uncover those trading below their true potential.
• Get ahead of the curve with advances in healthcare by checking out these 34 healthcare AI stocks, where artificial intelligence is changing the industry landscape.
• Secure consistent yield while pursuing smart growth. Explore these 21 dividend stocks with yields > 3% for stocks offering attractive dividends above 3%.

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