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ASX:NEC), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the ASX. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Nine Entertainment Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.” data-reactid=”28″>Nine Entertainment Co. Holdings Limited (ASX:NEC), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the ASX. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Nine Entertainment Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Nine Entertainment Holdings ” data-reactid=”29″> See our latest analysis for Nine Entertainment Holdings
What’s the opportunity in Nine Entertainment Holdings?
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 Nine Entertainment Holdings’s ratio of 18.09x is trading slightly above its industry peers’ ratio of 14.28x, which means if you buy Nine Entertainment Holdings today, you’d be paying a relatively reasonable price for it. And if you believe that Nine Entertainment Holdings should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, Nine Entertainment Holdings’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What kind of growth will Nine Entertainment Holdings generate?
earnings-and-revenue-growth
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. With profit expected to grow by 49% over the next couple of years, the future seems bright for Nine Entertainment Holdings. 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:
3 warning signs for Nine Entertainment Holdings (of which 1 is a bit concerning!) you should know about.” data-reactid=”53″>So if you’d like to dive deeper into this stock, it’s crucial to consider any risks it’s facing. Every company has risks, and we’ve spotted 3 warning signs for Nine Entertainment Holdings (of which 1 is a bit concerning!) you should know about.
50 other stocks with a high growth potential.” data-reactid=”58″>If you are no longer interested in Nine Entertainment Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.” data-reactid=”59″>This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
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