Why Air Arabia PJSC (DFM: AIRARABIA) might be worth watching
While Air Arabia PJSC (DFM: AIRARABIA) may not be the most well-known stock right now, it has seen a double-digit rise in its share price of over 10% over the past few years. last two months on the DFM. With many analysts covering the stock, we can expect any price sensitive announcement to have already factored into the stock price. But what if there is still an opportunity to buy? Let’s take a look at the outlook and value of Air Arabia PJSC based on the most recent financial data to see if the opportunity still exists.
Check out our latest review for Air Arabia PJSC
Is Air Arabia PJSC still cheap?
Good news, investors! Air Arabia PJSC is still a good deal at the moment under my multiple pricing model, which compares the company’s price / earnings ratio to the industry average. I used the price / earnings ratio in this case because there is not enough visibility to forecast its cash flow. The stock’s ratio of 24.74x is currently well below the industry average of 41.77x, meaning it is trading below its peers. Another thing to keep in mind is that Air Arabia PJSC’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you think the current stock price should move towards its industry peers, a low beta could suggest that it is not likely to reach that level anytime soon, and once there is. is, it can be difficult to fall back into an attractive purchase. range again.
What kind of growth will Air Arabia PJSC generate?
Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. While value investors argue that intrinsic value versus price matters most, a more compelling investment thesis would be high growth potential at a cheap price. With profits expected to more than double over the next two years, the future looks bright for Air Arabia PJSC. It appears that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What this means for you:
Are you a shareholder? Since AIRARABIA is currently below the industry PE ratio, it may be a good time to accumulate more of your holdings in inventory. With a positive outlook on the horizon, it appears that this growth has not yet been fully reflected in the share price. However, there are also other factors such as the capital structure to take into account, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping your eye on AIRARABIA for a while, it might be time to take the plunge. Its optimistic future earnings outlook is not yet fully reflected in the current share price, which means it is not too late to buy AIRARABIA. But before making any investment decision, consider other factors such as the track record of its management team, in order to make a well-informed assessment.
It can be very helpful to consider what analysts expect of Air Arabia PJSC from their most recent forecasts. At Simply Wall St, we have analyst estimates which you can view by clicking here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.