- Summary:
- What is the outlook of the Relx share price? We explain whether it is an extremely overvalued company and what to expect.
The Relx share price is hovering near its all-time high as investors react to the company’s strong growth. However, the REL stock is trading at 2,312p, slightly below London’s all-time high of 2,415p. On the other hand, the company’s shares are trading at $28.53 in New York, meaning they have declined by more than 10% in the past 30 days.
Relx is a global company in the technology industry that provides analytics to companies worldwide. The firm has clients in about 180 countries, and it operates in about 40 countries. It is a firm with more than 33,000 employees. Relx operates in four key markets: risk, legal, exhibitions, and scientific, technical and medical. Most of its customers and employees are in North America. At the same time, it generates most of its revenue using a subscription model.
Relx has had a rough growth path in the past few years. For example, its revenue rose from $9.55 billion in 2018 to over $10.4 billion in 2019. However, the revenue declined to $9.7 billion during the Covid-19 pandemic. Then, in 2021, the revenue jumped to over $9.7 billion. Nonetheless, its net income has held relatively steady at almost $2 billion.
As a result, the company is a bit overvalued. It is trading at a price-to-earnings ratio of 27.8x and a forward multiple of 25.3. Its price-to-sales ratio has moved to 5.60, which is significantly higher considering that it has a forward growth of 2.8%. At the same time, it is a highly indebted company that has a total debt of $8.35 billion and $152 million in cash.
Relx share price forecast
The daily chart shows that the Relx share price has been in a strong bullish trend in the past few months. It has found a strong resistance level at about 2,416p, where it has formed a double-top pattern. Most recently, it has formed a small double-top pattern at 2,441p.
Further, the shares have crossed the 25-day and 50-day moving averages while the money flow index (MFI) has pointed downwards. Therefore, there is a likelihood that the Relx stock price will likely pullback as investors target the key support at 2,200p. However, a move above the resistance at 2,416p will invalidate the bearish view.
