Is It Too Late To Consider Corporación América Airports (NYSE:CAAP) After Its Strong 3-Year Run?

• Investors may be wondering whether Corporación América Airports still represents good value after its strong share price history, or if most of the opportunity is already reflected in the current US$28.24 price.
• The stock has had a mixed recent run, with a 7% decline over the last week, a 5.5% gain over the past month, and returns of 6.3% year to date and 42.7% over the last year. Over longer periods, the 3 year gain is very large and the 5 year return is also very large.
• Recent attention on Corporación América Airports has been driven by ongoing interest in airport operators and traffic recovery, as investors reassess how resilient passenger volumes and commercial revenue might be over time. Broader sector news and macro headlines around travel appetite and infrastructure spending have also influenced changing risk perceptions for airport groups generally.
• Based on our checks, Corporación América Airports scores 3 out of 6 for potential undervaluation. Next we will compare different valuation approaches for the stock, before finishing with a way to think about value that goes beyond just the headline numbers.

Corporación América Airports delivered 42.7% returns over the last year. See how this stacks up to the rest of the Infrastructure industry.

Approach 1: Corporación América Airports Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business might be worth today by projecting its future cash flows and discounting them back to a present value using a required rate of return.

For Corporación América Airports, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $354.9 million. Analysts and extrapolated estimates point to Free Cash Flow of $333.5 million in 2026 and $357.5 million in 2027, rising to a projected $481 million by 2030, all in $ terms. Beyond the explicit analyst period, Simply Wall St extrapolates the cash flows through to 2035 using modest step changes each year.

When all those projected cash flows are discounted back and summed, the DCF model arrives at an estimated intrinsic value of about $65.25 per share, compared with the current share price of $28.24. That gap implies the stock is trading at roughly a 56.7% discount to this DCF estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Corporación América Airports is undervalued by 56.7%. Track this in your watchlist or portfolio, or discover 55 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Corporación América Airports.

Approach 2: Corporación América Airports Price vs Earnings

For a profitable company like Corporación América Airports, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. Investors typically accept a higher P/E when they expect stronger growth or see the earnings stream as relatively stable, and a lower P/E when growth looks more modest or the earnings profile carries more risk.

Corporación América Airports currently trades on a P/E of about 25.9x. That sits above the Infrastructure industry average of around 15.9x, but below the broader peer group average of roughly 38.8x. To refine this further, Simply Wall St uses a proprietary “Fair Ratio,” which is the P/E level it would expect for the company once factors like earnings growth, profit margins, risk profile, industry, and market cap are all taken into account.

For Corporación América Airports, that Fair Ratio is calculated at about 23.3x. This tailored yardstick can be more informative than simple comparisons to industry or peers because it is specific to the company’s characteristics. With the current P/E of 25.9x sitting above the Fair Ratio, the shares screen as somewhat expensive on this earnings based measure.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Corporación América Airports Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple stories you create about a company that sit behind the numbers you use for fair value, and your estimates for future revenue, earnings and margins. A Narrative links what you believe about a company’s business to a financial forecast, and then to a fair value that you can compare directly to today’s share price. On Simply Wall St, millions of investors build and share these Narratives on the Community page, so you can see how others are thinking, or set up your own in a few clicks. Narratives help you decide whether to act by showing you, in one place, how your Fair Value compares to the current Price, and they automatically refresh when new information like news or earnings is added. For Corporación América Airports, one investor might build a Narrative that supports a very high fair value per share while another might arrive at a much lower fair value based on a more cautious view of future traffic and margins.

Do you think there's more to the story for Corporación América Airports? Head over to our Community to see what others are saying!

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.

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