Is There Now An Opportunity In Xtep International Holdings Limited (HKG:1368)?

Simply Wall St · 07/04 22:09

Xtep International Holdings Limited (HKG:1368), might not be a large cap stock, but it led the SEHK gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Xtep International Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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Is Xtep International Holdings Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Xtep International Holdings’s ratio of 10.29x is trading slightly above its industry peers’ ratio of 9.65x, which means if you buy Xtep International Holdings today, you’d be paying a relatively reasonable price for it. And if you believe that Xtep International Holdings should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. In addition to this, it seems like Xtep International Holdings’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

Check out our latest analysis for Xtep International Holdings

What does the future of Xtep International Holdings look like?

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SEHK:1368 Earnings and Revenue Growth July 4th 2025

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 28% over the next couple of years, the future seems bright for Xtep International Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? 1368’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at 1368? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on 1368, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for 1368, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Xtep International Holdings, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Xtep International Holdings you should be aware of.

If you are no longer interested in Xtep International Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.