The ALS Ltd (ASX: ALQ) share price has continued its strong run and is up over 8% to $7.79 in morning trade.
This means the testing services company's shares have now risen almost 29% year-to-date.
Why has it jumped today?
With no news out of the company this morning, today's gain is likely to be attributable to a research note out of Credit Suisse.
According to the note, its analysts are optimistic that there could be an uptick in gold miner exploration following a spate of capital raisings. This could result in a surge in demand for its testing services.
As a result, the investment bank has upgraded ALS Ltd's shares to an outperform rating and increased its price target to $7.80.
Should you invest?
Following its strong gain this year, its shares are now changing hands at over 35x trailing earnings.
Whilst this is a little on the expensive side, if the company can deliver on its 2022 goals then it could justify the premium.
In FY 2017 ALS delivered underlying EBITDA of $253.1 million on revenue of $1.3 billion. But by 2022 the company is targeting EBITDA of over $500 million on $2.2 billion in revenue.
To achieve this management is focusing on mid-single digit organic growth, operational efficiency, innovation and technology, and targeted acquisitions.
But as promising as this all is, I would still suggest investors hold off an investment and wait for a better entry point.
