Compagnie des Alpes Shares Surge as Q1 Sales Jump 10%, Sparking Valuation Debate

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PARIS – Compagnie des Alpes (ENXTPA:CDA), the operator behind iconic ski resorts like Tignes and leisure parks such as Parc Astérix, posted robust first-quarter results, signaling a powerful start to its fiscal year. Consolidated sales climbed to €289.0 million, a 10.4% increase from €261.8 million a year prior. This double-digit growth arrives as the company's shares ride a wave of momentum, having delivered a 37.47% return over the last 90 days and a staggering 78.24% total shareholder return over one year.

The sales beat adds fuel to a longer-term success story, with three- and five-year total shareholder returns standing at 129.46% and 142.78%, respectively. The performance underscores a resilient post-pandemic recovery in the European leisure sector, though analysts are now scrutinizing whether the stock's recent run-up has left room for further gains.

At a current share price around €27.00, Compagnie des Alpes trades at a price-to-earnings (P/E) ratio of 12.8x. This valuation sits notably below the peer group average of 18.1x and the broader European hospitality industry average of 17.6x. According to a standard SWS fair value estimate, the stock also trades below an estimated fair P/E of 14.1x, suggesting a potential undervaluation based on current earnings.

Result: Price-to-earnings of 12.8x (UNDERVALUED)

However, a deeper discounted cash flow (DCF) analysis paints an even more bullish picture, pointing to a fair value estimate of approximately €38 per share. This significant gap between the P/E and DCF valuations highlights a central debate for investors: is the market underestimating the company's future cash generation, or are risks like potential pressure on consumer discretionary spending being prudently priced in?

"The numbers are undeniably strong, and the valuation gap is compelling," commented Thomas Reinhart, a portfolio manager at Alpine Capital. "For a business with such stable assets and a proven track record, a sub-13x P/E in this environment feels like an anomaly. The DCF model might be aggressive, but the direction is correct."

Offering a more cautious perspective, Claire Dubois, an independent market analyst, noted: "While the growth is impressive, we must remember this is a highly weather-dependent and economically sensitive business. One harsh winter or a dip in consumer confidence could quickly reverse these trends. The current P/E might simply reflect that inherent volatility."

A more critical take came from Marco Silva, a vocal commentator on financial forums: "This is classic short-term euphoria. The stock has already nearly doubled in a year! Everyone's piling in based on a single quarter, ignoring the massive debt on the balance sheet and the cyclical nature of the business. Calling it 'undervalued' now is a joke—the growth is already priced in and then some."

Adding a sector-wide view, Elise Chen, a strategist at a European investment bank, said: "Compagnie des Alpes is a bellwether for experiential leisure. Their performance validates a broader shift in consumer spending towards experiences over goods. If they can maintain this momentum, it could re-rate the entire sector."

Investors weighing the opportunity must balance these attractive valuation signals against identifiable risks, including the sustainability of current revenue and net income growth trends of 4.8% and 7.2%, respectively.

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.

Companies discussed in this article include CDA.PA.

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