Is It Too Late To Consider Corporación América Airports (NYSE:CAAP) After Its Strong 1-Year Rally?

• If you are wondering whether Corporación América Airports shares still offer value after a strong run, you are not alone. That is exactly what this article will unpack.
• The stock last closed at US$29.18, with returns of 2.0% over 7 days, 3.4% over 30 days, 9.8% year to date, 57.6% over 1 year, and a very large gain over 5 years.
• Recent coverage has focused on Corporación América Airports as a pure play on airport operations, with investors paying close attention to how traffic volumes and concession terms shape long term prospects. This context helps explain why the market has been reassessing the risk and reward profile of the stock.
• On our valuation checks, Corporación América Airports scores 2 out of 6, as shown in this valuation score. We will walk through what different valuation approaches say about the shares and then finish with a framework that can help you make even more sense of that number.

Corporación América Airports scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

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 future free cash flows and discounting them back to a present value.

For Corporación América Airports, the latest twelve month free cash flow is about $354.9 million. The DCF model used here is a 2 Stage Free Cash Flow to Equity approach that relies on analyst estimates where available, then extends those projections further out. For example, projected free cash flow for 2030 is $481 million, with intermediate years such as 2026 and 2027 modeled at $333.5 million and $357.5 million respectively, all in $ and mostly in the hundreds of millions.

When all those projected cash flows are discounted back and aggregated, the model arrives at an estimated intrinsic value of about $65.36 per share. In comparison with the recent share price of US$29.18, this framework suggests the stock is 55.4% undervalued according to this DCF model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Corporación América Airports is undervalued by 55.4%. Track this in your watchlist or portfolio, or discover 53 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 profitable companies like Corporación América Airports, the P/E ratio is a useful way to think about value because it links what you pay directly to the earnings the business is currently generating. It is a quick way to see how much the market is pricing each dollar of profit.

What counts as a “normal” P/E depends a lot on how investors view growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually point to a lower, more conservative multiple.

Corporación América Airports currently trades on a P/E of 26.78x. That sits above the Infrastructure industry average of about 15.98x and above the peer group average of 20.85x. Simply Wall St’s Fair Ratio for the company is 17.80x. This Fair Ratio is a proprietary estimate of what the P/E could be, given factors such as earnings growth, profit margins, the company’s industry, market value and specific risks, rather than just a simple comparison with peers.

Because the current P/E of 26.78x is higher than the Fair Ratio of 17.80x, this multiple based view points to the shares being priced on the expensive side today.

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 think about valuation, so let us introduce Narratives. In a Narrative you set out your story for Corporación América Airports, including what you think is a fair value and your assumptions for future revenue, earnings and margins. Simply Wall St then connects that story to a financial forecast, a fair value estimate and a clear Fair Value vs Price view on the Community page that millions of investors use. Your Narrative is updated when new news or earnings arrive. One investor might build a more optimistic Corporación América Airports Narrative around the higher US$29.95 fair value, while another uses a more cautious view closer to US$24.00. Both can quickly see how their own fair value compares with the current share price to help decide whether the stock looks attractive or stretched on their terms.

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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