Just Dial Limited (NSEI:JUSTDIAL), a internet company based in India, led the NSEI gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Just Dial’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Just Dial
What is Just Dial worth?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 28.06x is currently trading slightly Is there another opportunity to buy low in the future? Since Just Dial’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Just Dial 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 37.70% over the next couple of years, the future seems bright for Just Dial. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Just Dial’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at Just Dial? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on Just Dial, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for Just Dial, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.