Sabesp Q2: Stretched Valuation Overshadows The Great Result [Seeking Alpha]
EQUATORIAL ENERGIA S/ADR (EQUEY)
NASDAQ:AMEX Investor Relations:
equatorialenergia.com.br/default_en.asp?idioma=1&conta=44
Company Research
Source: Seeking Alpha
Follower s Follow Play 7min Summary Sabesp's 2Q24 results exceeded market expectations, with revenue and profit beating estimates by 21.7% and 25%, respectively. The company's privatization will allow for more assertive decision-making, enhancing operational flexibility. Despite strong performance, Sabesp's valuation is extremely stretched based on its EV/EBITDA history, warranting a hold recommendation. A greater margin of safety is needed before recommending a buy, adhering to value investing principles. NancyAyumi/iStock via Getty Images Investment Thesis I recommend holding Sabesp ( NYSE: SBS ) shares after 2Q24 results. Sabesp reported strong results in 2Q24, even beating market estimates in both revenue and earnings per share. In addition, the company will have much more freedom to make assertive decisions due to the privatization. However, the valuation is extremely stretched when we analyze the company's EV/EBITDA against its own history. As an analyst
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