At AU$44.65, Is It Time To Put Aristocrat Leisure Limited (ASX:ALL) On Your Watch List?
Aristocrat Leisure Limited (ASX:ALL) saw a double-digit share price rise of over 10% in the past couple of months on the ASX. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Aristocrat Leisure’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Aristocrat Leisure
Is Aristocrat Leisure Still Cheap?
According to our valuation model, Aristocrat Leisure seems to be fairly priced at around 16% below our intrinsic value, which means if you buy Aristocrat Leisure today, you’d be paying a reasonable price for it. And if you believe the company’s true value is A$53.37, then there’s not much of an upside to gain from mispricing. In addition to this, Aristocrat Leisure has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will Aristocrat Leisure generate?
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. Though in the case of Aristocrat Leisure, it is expected to deliver a relatively unexciting earnings growth of 7.6%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? ALL’s 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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on ALL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Diving deeper into the forecasts for Aristocrat Leisure mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.
If you are no longer interested in Aristocrat Leisure, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
