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Why Ashtrom Group is on investors' radar today
Ashtrom Group (TASE:ASHG) has recently drawn fresh attention after a period of positive share price performance over the past month and past 3 months, prompting investors to reassess its current valuation and fundamentals.
See our latest analysis for Ashtrom Group.
Measured over the past year, Ashtrom Group's share price has built positive momentum, with a 30 day share price return of 10.13% and a year to date share price return of 10.23%. The 1 year total shareholder return of 32.39% points to a stronger longer term payoff once dividends are included.
If Ashtrom's recent move has you looking for other ideas, this can be a good moment to broaden your search and check out fast growing stocks with high insider ownership .
With an intrinsic value estimate suggesting around an 8% premium to the current ₪80.14 share price and a high value score of 1, you have to ask: is Ashtrom Group now stretched, or is the market still pricing in future growth?
Price-to-Earnings of 31.9x: Is it justified?
With Ashtrom Group trading at ₪80.14 and on a P/E of 31.9x, the current price implies a relatively rich earnings multiple compared with some benchmarks.
The P/E ratio compares the share price to earnings per share, so a higher P/E usually signals that investors are paying more for each unit of current earnings, often because they expect stronger or more resilient profitability.
For Ashtrom Group, the picture is mixed. On one hand, the P/E of 31.9x sits below the Construction industry average of 34.3x and below a peer group average of 46.2x, which points to a cheaper valuation relative to those specific comparison sets. On the other hand, it is described as expensive versus the wider Asian Construction industry average of 14.9x, and earnings have declined by 31.2% per year over the past 5 years, with a low 5% return on equity and interest payments that are not well covered by earnings. That combination suggests the market is attaching a full price to a company with uneven profit history and modest profitability.
Against this backdrop, investors are effectively paying more than twice the Asian industry average earnings multiple, even though Ashtrom Group has only recently become profitable and past earnings trends have been weak, which raises the question of whether the current P/E fully reflects those fundamentals.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 31.9x (OVERVALUED)
However, the relatively high P/E and past earnings decline, together with interest payments not well covered by earnings, could challenge the case for paying a premium.
Find out about the key risks to this Ashtrom Group narrative.
Another angle from the DCF model
While the P/E comparison already makes Ashtrom Group look expensive against the wider Asian Construction industry, our DCF model goes even further. At a share price of ₪80.14, it suggests fair value of ₪8.54, which points to a very large premium on the current price.
For you as an investor, that kind of gap can signal valuation risk if the cash flow assumptions behind recent optimism do not hold up, or a more nuanced story if you think the model is too conservative for this type of business. Which side of that trade off do you think the market is pricing in today?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day ( check out Ashtrom Group for example ). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 873 undervalued stocks based on their cash flows . If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Ashtrom Group Narrative
If you see the numbers differently or prefer to test your own assumptions, you can build a full view in just a few minutes with Do it your way .
A great starting point for your Ashtrom Group research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
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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.
Companies discussed in this article include ASHG.TA .
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