Today, we delve into Euronav NV (EURN, Financial)'s valuation, considering its daily loss of 8.5%, a 3-month gain of 12.1%, and an Earnings Per Share (EPS) (EPS) of 2.92. The question remains: is the stock significantly undervalued? This article aims to provide a thorough valuation analysis of Euronav NV (EURN) to answer this question. So, let's get into it.
Introduction to Euronav NV
Euronav NV, with its primary operations in maritime shipping and storage of crude oil and petroleum products, has established itself as a significant player in the industry. The company's revenue generation is primarily from its tankers segment, operating crude oil tankers on international markets. The current stock price stands at $16, while the GF Value, a measure of fair value, is at $24.04. This discrepancy prompts a closer look into the company's intrinsic value.
Diving into the GF Value
The GF Value is a unique measure of a stock's intrinsic value, calculated based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line provides an overview of the stock's fair trading value, around which the stock price is likely to fluctuate. If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
Euronav NV (EURN, Financial), with its current price of $16 per share and a market cap of $3.20 billion, shows signs of being significantly undervalued. This indicates that the long-term return of its stock is likely to be much higher than its business growth.
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Financial Strength of Euronav NV
Assessing the financial strength of a company is crucial before investing in its stock. Euronav NV has a cash-to-debt ratio of 0.09, which is worse than 81.33% of 1034 companies in the Oil & Gas industry. The overall financial strength of Euronav NV is 5 out of 10, indicating fair financial strength.
Profitability and Growth of Euronav NV
Investing in profitable companies, especially those with consistent profitability over the long term, is usually less risky. Euronav NV's profitability is ranked 6 out of 10, indicating fair profitability. The company's operating margin is 47.3%, ranking better than 89.13% of 984 companies in the Oil & Gas industry.
Growth is a crucial factor in the valuation of a company. Euronav NV's 3-year average annual revenue growth is 1.6%, ranking worse than 67.63% of 862 companies in the Oil & Gas industry. The 3-year average EBITDA growth rate is 3.4%, ranking worse than 64.94% of 830 companies in the Oil & Gas industry.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) to the weighted average cost of capital (WACC) is another way to determine its profitability. Euronav NV's ROIC is 16.01, and its WACC is 4.96, indicating that the company is creating value for shareholders.
Conclusion
In conclusion, Euronav NV (EURN, Financial) appears to be significantly undervalued. The company's financial condition and profitability are fair, although its growth ranks lower than 64.94% of 830 companies in the Oil & Gas industry. To learn more about Euronav NV stock, you can check out its 30-Year Financials here.
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