Tourism Holdings Limited (NZSE:THL) is not the largest company, but it has seen its share price rise 18% on the NZSE over the past few months. Good news for shareholders, the company’s share price has risen significantly over the past year. With many analysts covering the stock, we would expect any price-sensitive announcements are already priced into the share price. But what if there is still an opportunity to buy? Let’s take a look at Tourism Holdings’ outlook and value based on the most recent financial data to see if the opportunity still exists.
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What are the opportunities in Tourism Holdings?
Good news for investors. Tourism Holdings is still trading at a fairly cheap price, according to our price-to-earnings model. The model compares the company’s price-to-earnings ratio to the industry average. In this example, we used the price-to-earnings ratio because we don’t have enough visibility to forecast cash flows. The stock’s 7.01x ratio is currently well below the industry average of 16.2x, meaning it is trading at a cheap price relative to its peers. What’s more, Tourism Holdings’ share price is highly volatile, which increases the chance of a buy as the stock may fall (or rise) further in the future. This is based on its high beta, which is a good indicator of how volatile a stock is relative to the overall market.
What kind of growth will Tourism Holdings generate?
NZSE:THL Earnings and Revenue Growth 18 July 2024
NZSE:THL Earnings and Revenue Growth 18 July 2024Future outlook is an important aspect when considering buying a stock, especially for investors looking for growth in their portfolio. While value investors would argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment argument is high growth potential at a low price. With earnings expected to grow 44% over the next few years, Tourism Holdings’ future looks bright. The stock is expected to have higher cash flows, which should lead to a higher share valuation.
What this means for you
Are you a shareholder? THL is currently trading below the industry PE ratio, so now may be a good time to increase your holding. With an optimistic outlook, it appears this growth has not yet been fully priced into the share price. However, we should also consider other factors that could explain the current share price multiple, such as capital structure.
Are you a potential investor? If you’ve been keeping an eye on THL for a while, now might be the time to buy shares. It’s not too late to buy THL, as the company’s future earnings prospects are not yet fully reflected in the current share price. However, make an informed assessment, taking into account other factors such as the track record of management, before making an investment decision.
When analysing any stock, it’s important to be aware of the risks involved. For example, we’ve discovered that Tourism Holdings has 4 warning signs (3 are concerning!) that you should be aware of before proceeding with your analysis.
If you are no longer interested in Tourism Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Valuation is complicated, but we can help make it simple.
Check out our comprehensive analysis, including fair value estimates, risks and warnings, dividends, insider transactions, financials and more, to find out if Tourism Holdings is overvalued or undervalued.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
Valuation is complicated, but we can help make it simple.
Check out our comprehensive analysis, including fair value estimates, risks and warnings, dividends, insider transactions, financials and more, to find out if Tourism Holdings is overvalued or undervalued.
View your free analysis
Have something to say about this article? If you have any questions about the content, please contact us directly or email us at editorial-team@simplywallst.com.
