Looking at CCC SA.’s (WSE:CCC) fundamentals some investors are wondering if its last closing price of PLN259 represents a good value for money for this high growth stock. Let’s look into this by assessing CCC’s expected growth over the next few years. View our latest analysis for CCC
Should you get excited about CCC’s future?
The excitement around CCC’s growth potential is not unfounded. The consensus forecast from 11 analysts is extremely positive with earnings per share estimated to surge from current levels of PLN6.964 to PLN16.009 over the next three years. On average, this leads to a growth rate of 25.82% each year, which illustrates a highly optimistic outlook in the near term.Is CCC available at a good price after accounting for its growth?
CCC is trading at quite a high price-to-earnings (PE) ratio of 37.19x. This tells us that CCC is overvalued compared to the PL market average ratio of 13.08x , and overvalued based on current earnings compared to the luxury industry average of 13.69x .
After looking at CCC’s value based on current earnings, we can see it seems overvalued relative to other companies in the industry. However, seeing as CCC is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 37.19x and expected year-on-year earnings growth of 25.82% give CCC a higher PEG ratio of 1.44x. Based on this growth, CCC’s stock can be considered slightly overvalued , based on fundamental analysis.
What this means for you:
CCC’s current overvaluation could signal a potential selling opportunity to reduce your exposure to the stock, or it you’re a potential investor, now may not be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:
- Financial Health: Is CCC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Past Track Record: Has CCC been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of CCC’s historicals for more clarity.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.