Zodiac Energy Downgraded to 'Hold' by MarketsMOJO, But Shows Strong Long-Term Growth and Positive Market Performance

Zodiac Energy, a smallcap company in the engineering and industrial equipment industry, has recently been downgraded to a 'Hold' by MarketsMOJO on August 21, 2024. This decision was based on the company's healthy long-term growth, with an annual operating profit growth rate of 49.63%. Additionally, the company declared outstanding results in June 2024, with a 184.15% growth in net profit. This positive trend has continued for the last five consecutive quarters, with a 147.17% growth in net sales and a 318.57% growth in PBT less OI.
Technically, the stock is currently in a mildly bullish range, with multiple factors such as KST, DOW, and OBV indicating a bullish outlook. In terms of market performance, Zodiac Energy has outperformed the market (BSE 500) with a return of 479.53% in the last year, compared to the market's 38.03% return.

However, with a ROCE of 8.8, the stock is currently trading at a very expensive valuation, with an enterprise value to capital employed ratio of 14.8. Despite this, the stock is still trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a significant return of 479.53%, its profits have only risen by 139%, resulting in a PEG ratio of 0.7.

It is also worth noting that despite its size, domestic mutual funds hold a mere 0% stake in Zodiac Energy. This could signify that they are either not comfortable with the current price or have not conducted in-depth research on the company. As a smallcap company, Zodiac Energy may have potential for growth, but it is important to carefully consider its valuation and the opinions of market experts before making any investment decisions.