Shikun & Binui (TASE:SKBN) is back in focus after its energy arm signed a build operate transfer deal with the State of Israel to develop a 150 MW solar plant with 460 MWh storage in Ashalim.
See our latest analysis for Shikun & Binui.
The Ashalim solar and storage deal lands at a time when the share price has a 30 day return of 12.58% and a 90 day return of 16.89%, while the 1 year total shareholder return of 62.06% points to strong longer term momentum.
If this kind of energy transition story has your attention, it could be a good moment to widen your search and check out aerospace and defense stocks as another source of ideas.
With the share price already up strongly over the past year and the Ashalim project adding a fresh headline, the key question now is simple: is Shikun & Binui still undervalued, or is the market already pricing in future growth?
Price to Sales of 1.3x: Is it justified?
On the latest figures, Shikun & Binui trades at a P/S ratio of 1.3x, which sits above both its construction industry group and its closest peers.
The P/S multiple compares the company's market value with its revenue, so you are effectively paying 1.3 times Shikun & Binui's annual sales for each share. For infrastructure and construction businesses where earnings can be uneven and currently negative, investors often fall back on sales-based measures like this.
Here, the P/S of 1.3x is described as expensive versus the Israel Construction industry average of 1.1x and the peer average of 1.2x. That means the market is assigning Shikun & Binui a richer revenue tag than many similar companies, even though the company is currently unprofitable and has reported increasing losses of 7.1% per year over the past 5 years.
Put simply, the stock carries a premium P/S tag versus the sector and peers, and there is no fair ratio reference point yet to suggest the market might shift closer to a different level. See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-sales of 1.3x (OVERVALUED)
However, there are clear risks to that premium story, including the current net loss of ₪462.0m and the possibility that large BOT or PPP projects face delays or cost pressures.
Find out about the key risks to this Shikun & Binui narrative.
Build Your Own Shikun & Binui Narrative
If you see the numbers differently or simply prefer to test your own view against the data, you can build a complete narrative in just a few minutes, starting with Do it your way
A great starting point for your Shikun & Binui research is our analysis highlighting 2 important warning signs that could impact your investment decision.
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If Shikun & Binui has sharpened your focus, do not stop here, the next opportunity you research could be the one that truly changes your portfolio.
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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 SKBN.TA .
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