What Is The Navigator Company, S.A.'s (ELI:NVG) Share Price Doing?

While The Navigator Company, S.A. (ELI:NVG) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the ENXTLS over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Navigator Company’s outlook and valuation to see if the opportunity still exists.

Our analysis indicates that NVG is potentially undervalued!

What Is Navigator Company Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to 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 Navigator Company’s ratio of 7.97x is trading slightly above its industry peers’ ratio of 7.27x, which means if you buy Navigator Company today, you’d be paying a relatively reasonable price for it. And if you believe Navigator Company should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since Navigator Company’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.

Can we expect growth from Navigator Company?

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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Navigator Company, at least in the near future.

What This Means For You

Are you a shareholder? NVG seems priced close to industry peers right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on NVG, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on NVG for a while, now may not be the most optimal time to buy, given it is trading around industry price multiples. This means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on NVG should the price fluctuate below the industry PE ratio.

If you want to dive deeper into Navigator Company, you'd also look into what risks it is currently facing. Our analysis shows 2 warning signs for Navigator Company (1 is a bit unpleasant!) and we strongly recommend you look at them before investing.

If you are no longer interested in Navigator Company, 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.