Corporacion America Airports SA (CAAP, Financial) has recently displayed a notable daily gain of 10.58%, despite a 3-month decline of 9.43%. With an Earnings Per Share (EPS) of $1.04, investors might wonder if the stock is fairly valued. This article embarks on a valuation analysis to explore whether Corporacion America Airports SA stands at a fair market valuation and what that means for potential investors.
Company Introduction
Corporacion America Airports SA operates a diversified portfolio of airport concessions, primarily in Argentina, and extends its reach to Italy, Brazil, Uruguay, Ecuador, and Armenia. The company's revenue streams include Aeronautical, Non-Aeronautical, Commercial, and Construction Service Revenue. With a current stock price of $13.06 and a market cap of $3.30 billion, a comparison with the GF Value of $12.07 suggests a need for a deeper dive into its intrinsic value.
Summarize GF Value
The GF Value is an exclusive measure that reflects the intrinsic value of a stock. It is derived from historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. When a stock trades significantly above this value, it may be overvalued, and conversely, if it is below, it could suggest a higher future return.
Currently, Corporacion America Airports SA's stock price positions it as fairly valued, with the potential for future returns to align closely with the company's business growth rate.
Link: Discover companies that may deliver higher future returns at reduced risk.
Financial Strength
Assessing the financial strength of a company is crucial before investing. Corporacion America Airports SA's cash-to-debt ratio stands at 0.35, placing it below average in the Transportation industry. Its overall financial strength is rated as fair, with a score of 5 out of 10.
Profitability and Growth
Corporacion America Airports SA has achieved profitability in 6 out of the past 10 years, with an impressive operating margin that surpasses most of its industry peers. Its profitability is deemed fair, while its growth prospects, despite a negative 3-year average annual revenue growth rate, are bolstered by a robust EBITDA growth rate that ranks favorably within the industry.
ROIC vs. WACC
Comparing a company's Return on Invested Capital (ROIC) with its Weighted Average Cost of Capital (WACC) provides insight into its value creation. Corporacion America Airports SA's ROIC of 7.94% is currently below its WACC of 10.45%, suggesting challenges in generating cash flow relative to the capital invested.
Conclusion
In summary, Corporacion America Airports SA (CAAP, Financial) appears to be fairly valued, with a stable financial condition and reasonable profitability. It ranks well in growth compared to its industry counterparts. For a more detailed financial overview, interested investors can review Corporacion America Airports SA's 30-Year Financials here.
To discover high-quality companies that may deliver above-average returns, visit the GuruFocus High Quality Low Capex Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
