ALS (ASX:ALQ): Valuation Check After New Shares Issued Under Dividend and Distribution Plan

ALS (ASX:ALQ) has just lodged an application to quote 342,915 new fully paid ordinary shares issued under its dividend or distribution plan. It is a relatively small move that still speaks directly to capital management.

See our latest analysis for ALS.

The fresh shares land against a backdrop of firm momentum, with ALS’s share price at A$22.12 and a strong year to date share price return supported by robust multi year total shareholder returns, which suggests that confidence in its growth path is building.

If this kind of capital management story has your attention, now is a good time to explore fast growing stocks with high insider ownership for other fast moving opportunities.

But with ALS delivering solid growth, strong multi year returns and trading only slightly below analyst targets, is the recent strength still leaving room for upside, or is the market already pricing in its future expansion?

Most Popular Narrative Narrative: 1.6% Undervalued

With ALS closing at A$22.12 against a narrative fair value of A$22.47, the story leans toward modest upside driven by measured, compounding fundamentals.

The analysts have a consensus price target of A$17.766 for ALS based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of A$20.5, and the most bearish reporting a price target of just A$11.1.

Read the complete narrative.

Curious why a disciplined discount rate, steady revenue growth, expanding margins and a rich future earnings multiple still only point to gentle upside? Unlock the full narrative to see which assumptions really carry this valuation.

Result: Fair Value of $22.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained margin pressure from recent acquisitions, or a sharper than expected slowdown in commodities end markets, could quickly challenge this measured upside story.

Find out about the key risks to this ALS narrative.

Another Lens on Value

Multiples tell a sharper story than the gentle 1.6% upside implied by the narrative fair value. At about 41.4 times earnings versus 17.6 times for the global professional services industry and a 31.8 times fair ratio, ALS screens as richly priced, raising the question of how much execution risk investors are really being paid for.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own ALS Narrative

If this view does not quite match your own thinking, dig into the numbers yourself and craft a personalised storyline in minutes, Do it your way.

A great starting point for your ALS research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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