Sun TV Network Limited (NSEI:SUNTV), a media company based in India, received a lot of attention from a substantial price increase on the NSEI in the 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. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Sun TV Network’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for Sun TV Network
What is Sun TV Network worth?
According to my valuation model, the stock is currently overvalued by about 80%, trading at ₹936.5 compared to my intrinsic value of ₹519.04. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that Sun TV Network’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 intrinsic value over time, 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.
Can we expect growth from Sun TV Network?
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. Sun TV Network’s earnings over the next few years are expected to increase by 51.00%, 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? Sun TV Network’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe Sun TV Network 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 Sun TV Network 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 optimistic prospect is encouraging for Sun TV Network, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.