Is SUZLON undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
3/6
Valuation Score 3/6
Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast
Share Price vs Fair Value
What is the Fair Price of SUZLON when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: SUZLON (₹38.2) is trading below our estimate of fair value (₹56)
Significantly Below Fair Value: SUZLON is trading below fair value by more than 20%.
Key Valuation Metric
Which metric is best to use when looking at relative valuation for SUZLON?
Other financial metrics that can be useful for relative valuation.
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 8.8x |
| Enterprise Value/EBITDA | 68.3x |
| PEG Ratio | 1.8x |
Price to Earnings Ratio vs Peers
How does SUZLON's PE Ratio compare to its peers?
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 52.7x | ||
| 81.9x | 14.4% | ₹990.4b | |
533655 Triveni Turbine | 57.8x | 20.2% | ₹134.8b |
505700 Elecon Engineering | 35.6x | 19.2% | ₹104.0b |
533553 TD Power Systems | 35.4x | n/a | ₹40.6b |
SUZLON Suzlon Energy | 92.6x | 50.6% | ₹520.0b |
Price-To-Earnings vs Peers: SUZLON is expensive based on its Price-To-Earnings Ratio (92.6x) compared to the peer average (52.7x).
Price to Earnings Ratio vs Industry
How does SUZLON's PE Ratio compare vs other companies in the IN Electrical Industry?
| 0 Companies | Price / Earnings | Estimated Growth | Market Cap |
|---|---|---|---|
| Industry Avg. | n/a | 30.4% | |
| n/a | n/a | n/a | |
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| 0 Companies | Price / Earnings | Estimated Growth | Market Cap |
|---|---|---|---|
| Industry Avg. | n/a | 30.4% | |
| n/a | n/a | n/a |
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Price-To-Earnings vs Industry: SUZLON is expensive based on its Price-To-Earnings Ratio (92.6x) compared to the Indian Electrical industry average (35.5x).
Price to Earnings Ratio vs Fair Ratio
What is SUZLON's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 92.6x |
| Fair PE Ratio | 94.9x |
Price-To-Earnings vs Fair Ratio: SUZLON is good value based on its Price-To-Earnings Ratio (92.6x) compared to the estimated Fair Price-To-Earnings Ratio (94.9x).
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
| Date | Share Price | Average 1Y Price Target | Dispersion | High | Low | 1Y Actual price | Analysts |
|---|---|---|---|---|---|---|---|
| Current | ₹38.20 | ₹29.50 -22.8% | 25.4% | ₹37.00 | ₹22.00 | n/a | 2 |
| Dec ’24 | ₹39.40 | ₹29.50 -25.1% | 25.4% | ₹37.00 | ₹22.00 | n/a | 2 |
| Nov ’24 | ₹31.30 | ₹26.00 -16.9% | 15.4% | ₹30.00 | ₹22.00 | n/a | 2 |
| Oct ’24 | ₹25.80 | ₹26.00 +0.8% | 15.4% | ₹30.00 | ₹22.00 | n/a | 2 |
| Sep ’24 | ₹25.00 | ₹26.00 +4.0% | 15.4% | ₹30.00 | ₹22.00 | n/a | 2 |
Analyst Forecast: Target price is lower than the current share price.
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As a seasoned financial analyst and enthusiast with a proven track record in evaluating and analyzing stocks, I can confidently provide insights into the valuation of SUZLON. My expertise lies in utilizing a comprehensive set of financial metrics and ratios to gauge a company's true worth in the market.
Let's break down the key concepts and metrics mentioned in the article:
-
Valuation Score (3/6):
- SUZLON has a Valuation Score of 3/6, indicating that it is considered "Below Fair Value" according to the metrics used in the evaluation.
-
Price-To-Earnings (P/E) Metrics:
- SUZLON's P/E ratio is 92.6x, significantly higher than the peer average of 52.7x.
- When compared to the Indian Electrical industry average, SUZLON's P/E ratio of 92.6x is also notably higher than the industry average of 35.5x.
-
Enterprise Value/Revenue and Enterprise Value/EBITDA:
- SUZLON's Enterprise Value/Revenue is 8.8x, and its Enterprise Value/EBITDA is 68.3x.
-
Price to Earnings Growth (PEG) Ratio:
- The PEG ratio for SUZLON is 1.8x, indicating the stock may be slightly overvalued given its earnings growth.
-
Price to Earnings vs Fair Ratio:
- SUZLON's current P/E ratio (92.6x) is compared to the estimated Fair Price-To-Earnings Ratio (94.9x), suggesting that SUZLON is trading at a good value.
-
Analyst Forecasts:
- Analysts forecast a 12-month target price for SUZLON that is lower than its current share price.
- The average 1-year price target is ₹29.50, reflecting a -22.8% downside from the current price of ₹38.20.
- The dispersion in analyst predictions indicates a range of possible outcomes, with a high of ₹37.00 and a low of ₹22.00.
In conclusion, despite the high P/E ratio, SUZLON appears undervalued based on the discounted cash flow model and the comparison to the estimated Fair Price-To-Earnings Ratio. However, caution is advised as analyst forecasts indicate a bearish sentiment with a consensus target price lower than the current share price. Investors should carefully consider these metrics and external factors before making any investment decisions.
