Dalata Hotel Group plc (ISE:DHG), which is in the hospitality business, and is based in Ireland, saw a double-digit share price rise of over 10% in the past couple of months on the ISE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Dalata Hotel Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What is Dalata Hotel Group worth?
According to my valuation model, Dalata Hotel Group seems to be fairly priced at around 8.8% below my intrinsic value, which means if you buy Dalata Hotel Group today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €5.21, then there’s not much of an upside to gain from mispricing. What's more, Dalata Hotel Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from Dalata Hotel Group?
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. 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. However, with a relatively muted profit growth of 7.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Dalata Hotel Group, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in DHG’s future outlook, 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 DHG, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Dalata Hotel Group. You can find everything you need to know about Dalata Hotel Group in the latest infographic research report. If you are no longer interested in Dalata Hotel Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.