The Market Lifts The National Agricultural Development Company (TADAWUL:6010) Shares 29% But It Can Do More
The Market Lifts The National Agricultural Development Company (TADAWUL:6010) Shares 29% But It Can Do More Simply Wall St
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Introduction
Those holding The National Agricultural Development Company (TADAWUL:6010) shares would be relieved that the share price has rebounded 29% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Looking back a bit further, it’s encouraging to see the stock is up 37% in the last year.
Sustainable Development Goals (SDGs)
- Goal 1: No Poverty
- Goal 2: Zero Hunger
- Goal 8: Decent Work and Economic Growth
- Goal 12: Responsible Consumption and Production
National Agricultural Development’s Price-to-Sales Ratio
Although its price has surged higher, National Agricultural Development’s price-to-sales (or “P/S”) ratio of 0.9x might still make it look like a strong buy right now compared to the wider Food industry in Saudi Arabia, where around half of the companies have P/S ratios above 3.3x and even P/S above 6x are quite common. Although, it’s not wise to just take the P/S at face value as there may be an explanation why it’s so limited.
Analysis of National Agricultural Development’s Recent Performance
National Agricultural Development certainly has been doing a good job lately as it’s been growing revenue more than most other companies. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the share price, and thus the P/S ratio. If you like the company, you’d be hoping this isn’t the case so that you could potentially pick up some stock while it’s out of favor.
Revenue Growth Metrics and P/S Ratio
There’s an inherent assumption that a company should far underperform the industry for P/S ratios like National Agricultural Development’s to be considered reasonable. Retrospectively, the last year delivered an exceptional 18% gain to the company’s top line. Pleasingly, revenue has also lifted 35% in aggregate from three years ago, thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing revenue over that time. Turning to the outlook, the next three years should generate growth of 8.3% each year as estimated by the dual analysts watching the company. That’s shaping up to be similar to the 7.0% each year growth forecast for the broader industry. With this information, we find it odd that National Agricultural Development is trading at a P/S lower than the industry. Apparently some shareholders are doubtful of the forecasts and have been accepting lower selling prices.
Conclusion
Shares in National Agricultural Development have risen appreciably however, its P/S is still subdued. Typically, we’d caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company. We’ve seen that National Agricultural Development currently trades on a lower than expected P/S since its forecast growth is in line with the wider industry. Despite average revenue growth estimates, there could be some unobserved threats keeping the P/S low. However, if you agree with the analysts’ forecasts, you may be able to pick up the stock at an attractive price.
Valuation Analysis
Find out whether National Agricultural Development is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions, and financial health.
Feedback and Disclaimer
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
SDGs, Targets, and Indicators Analysis
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 12: Responsible Consumption and Production
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries.
- SDG 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries.
- SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Revenue growth rate
- Price-to-sales (P/S) ratio
The article discusses the recent performance of The National Agricultural Development Company, highlighting its revenue growth and P/S ratio. These indicators can be used to measure progress towards SDG targets related to economic growth, industrialization, and responsible consumption and production.
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries. | Revenue growth rate |
| SDG 9: Industry, Innovation, and Infrastructure | SDG 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries. | Revenue growth rate |
| SDG 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries. | Price-to-sales (P/S) ratio | |
| SDG 12: Responsible Consumption and Production | SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. | Price-to-sales (P/S) ratio |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: simplywall.st
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