Samhi Hotels Faces Valuation Shift Amidst Strong Profit Growth and Debt Concerns

Samhi Hotels, a small-cap player in the Hotels & Resorts industry, has recently undergone an adjustment in its evaluation. The stock's valuation grade has shifted from expensive to very expensive, reflecting a notable change in its financial metrics. The price-to-earnings (PE) ratio stands at 93.05, while the price-to-book value is recorded at 4.14. Additionally, the enterprise value to EBITDA ratio is 17.34, and the enterprise value to capital employed is 2.08.
Despite a reported return of 9.55% over the past year, the company has shown a relatively modest return on capital employed (ROCE) of 7.25%. The operating profit has experienced an annual growth rate of 8.04% over the last five years, indicating challenges in long-term growth. Furthermore, the company has a high debt-to-EBITDA ratio of 5.84 times, which raises concerns about its ability to service debt.

On a positive note, Samhi Hotels has reported a significant net profit growth of 101.27% in its latest quarter, maintaining a streak of positive results for the past six quarters. The stock is currently positioned in a mildly bullish technical range, supported by high institutional holdings at 65.91%.

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