Should You Think About Buying Dr. Sulaiman Al Habib Medical Services Group Company (TADAWUL:4013) Now?

Dr. Sulaiman Al Habib Medical Services Group Company (TADAWUL:4013) saw a decent share price growth in the teens level on the SASE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Dr. Sulaiman Al Habib Medical Services Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Dr. Sulaiman Al Habib Medical Services Group

What's the opportunity in Dr. Sulaiman Al Habib Medical Services Group?

Dr. Sulaiman Al Habib Medical Services Group appears to be overvalued by 35% at the moment, based on my discounted cash flow valuation. The stock is currently priced at ر.س188 on the market compared to my intrinsic value of SAR139.37. This means that the buying opportunity has probably disappeared for now. In addition to this, it seems like Dr. Sulaiman Al Habib Medical Services Group’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 Dr. Sulaiman Al Habib Medical Services Group 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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Dr. Sulaiman Al Habib Medical Services Group's earnings over the next few years are expected to increase by 24%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in 4013’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 4013 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 4013 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 4013, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Dr. Sulaiman Al Habib Medical Services Group, 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.