Today we're going to take a look at the well-established Ctrip.com International, Ltd. (NASDAQ:CTRP). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $40.76 at one point, and dropping to the lows of $31.39. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Ctrip.com International's current trading price of $33.08 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ctrip.com International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Ctrip.com International
What's the opportunity in Ctrip.com International?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.3% below my intrinsic value, which means if you buy Ctrip.com International today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $34.22, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Ctrip.com International’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Ctrip.com International?
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 profit expected to more than double over the next couple of years, the future seems bright for Ctrip.com International. 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? It seems like the market has already priced in CTRP’s positive 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?