Yahoo Finance Zenitas Healthcare Limited (ASX:ZNT) Has Attractive Fundamentals, Here’s Why
I’ve been keeping an eye on Zenitas Healthcare Limited (ASX:ZNT) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe ZNT has a lot to offer. Basically, it is a financially-sound company with a an optimistic growth outlook, not yet factored into the price. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Zenitas Healthcare here.
High growth potential with excellent balance sheet
Investors in search of impressive top-line expansion should look no further than ZNT, with its expected revenue growth to more than double in the upcoming year, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that revenue is driven by high-quality cash from ZNT’s day-to-day business as opposed to one-off income. ZNT’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of ZNT’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the healthcare industry, ZNT is also trading below its peers of similar sizes in terms of their assets. This supports the theory that ZNT is potentially underpriced.
ZNT’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. ZNT appears to have made good use of debt, producing operating cash levels of 0.33x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For Zenitas Healthcare, I’ve compiled three essential aspects you should further examine:
Historical Performance: What has ZNT’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Dividend Income vs Capital Gains: Does ZNT return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ZNT as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ZNT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
