Is Genting Malaysia Berhad (KLSE:GENM) Potentially Undervalued? – Simply Wall St


Genting Malaysia Berhad (KLSE:GENM), might not be a large cap stock, but it saw a decent share price growth of 10% on the KLSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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 examine Genting Malaysia Berhad’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Genting Malaysia Berhad

What’s The Opportunity In Genting Malaysia Berhad?

Good news, investors! Genting Malaysia Berhad is still a bargain right now. According to our valuation, the intrinsic value for the stock is MYR3.56, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Genting Malaysia Berhad’s share price may be 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.

What does the future of Genting Malaysia Berhad look like?

KLSE:GENM Earnings and Revenue Growth January 20th 2024

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With revenues expected to grow by a double-digit 11% over the next couple of years, the outlook is positive for Genting Malaysia Berhad. If the level of expenses is able to be maintained, 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

Are you a shareholder? Since GENM is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on GENM for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GENM. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

With this in mind, we wouldn’t consider investing in a stock unless we had a thorough understanding of the risks. Our analysis shows 2 warning signs for Genting Malaysia Berhad (1 is concerning!) and we strongly recommend you look at them before investing.

If you are no longer interested in Genting Malaysia Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we’re helping make it simple.

Find out whether Genting Malaysia Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 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.



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