When Should You Buy Leejam Sports Company (TADAWUL:1830)?

Leejam Sports Company (TADAWUL:1830), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SASE over the last few months, increasing to ر.س213 at one point, and dropping to the lows of ر.س175. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Leejam Sports' current trading price of ر.س185 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Leejam Sports’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Leejam Sports

What Is Leejam Sports Worth?

Leejam Sports appears to be overvalued by 21% at the moment, based on our discounted cash flow valuation. The stock is currently priced at ر.س185 on the market compared to our intrinsic value of SAR153.10. This means that the opportunity to buy Leejam Sports at a good price has disappeared! In addition to this, it seems like Leejam Sports’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Leejam Sports generate?

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. With profit expected to grow by 22% over the next couple of years, the future seems bright for Leejam Sports. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? 1830’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 1830 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on 1830 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for 1830, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Leejam Sports, you'd also look into what risks it is currently facing. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Leejam Sports.

If you are no longer interested in Leejam Sports, 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.