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Corporate Travel Management Limited (ASX:CTD), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the ASX. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Corporate Travel Management’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Corporate Travel Management
What Is Corporate Travel Management Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.27% above our intrinsic value, which means if you buy Corporate Travel Management today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth A$12.56, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Corporate Travel Management’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Corporate Travel Management generate?
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. Corporate Travel Management's earnings over the next few years are expected to increase by 57%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? CTD’s optimistic 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 track record of its management team. 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?