What Is Eastern Province Cement Company's (TADAWUL:3080) Share Price Doing?

Eastern Province Cement Company (TADAWUL:3080), might not be a large cap stock, but it saw significant share price movement during recent months on the SASE, rising to highs of ر.س51.00 and falling to the lows of ر.س43.00. 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 Eastern Province Cement's current trading price of ر.س43.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Eastern Province Cement’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Eastern Province Cement

What is Eastern Province Cement worth?

Good news, investors! Eastern Province Cement is still a bargain right now according to my price multiple model, which compares 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 Eastern Province Cement’s ratio of 21.75x is below its peer average of 28.52x, which indicates the stock is trading at a lower price compared to the Basic Materials industry. Another thing to keep in mind is that Eastern Province Cement’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Eastern Province Cement 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. In Eastern Province Cement's case, its revenues over the next few years are expected to grow by 31%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since 3080 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on 3080 for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 3080. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.

If you'd like to know more about Eastern Province Cement as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Eastern Province Cement you should be aware of.

If you are no longer interested in Eastern Province Cement, 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.