ESR-REIT (SGX:J91U), which is in the reits business, and is based in Singapore, led the SGX gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at ESR-REIT’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for ESR-REIT

What is ESR-REIT worth?

Great news for investors – ESR-REIT is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is SGD0.66, but it is currently trading at S$0.34 on the share market, meaning that there is still an opportunity to buy now. ESR-REIT’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of ESR-REIT look like?

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. However, with a relatively muted revenue growth of 9.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for ESR-REIT, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since J91U is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on J91U for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy J91U. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on ESR-REIT. You can find everything you need to know about ESR-REIT in the latest infographic research report. If you are no longer interested in ESR-REIT, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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