Profitability, Solvency, and Sales Growth as Drivers of Stock Valuation in Real Estate and Construction

Abstract

The property, real estate, and building construction sectors are crucial contributors to economic development, with company performance significantly influencing stock market valuation. Financial performance, reflected through profitability and solvency ratios, and sales growth are key indicators shaping investor decisions. This study aims to examine the effects of financial performance and sales growth on stock prices in these sectors. A Systematic Literature Review (SLR) approach was employed, analyzing secondary data from scientific publications, including national and international journals, conference proceedings, and research reports published between 2019 and 2023. The study synthesizes findings on how profitability, solvency, and sales growth interact with stock prices, considering sector-specific characteristics and external market conditions. Results indicate that high profitability and controlled debt levels positively affect stock prices by enhancing investor confidence, while sustainable sales growth signals long-term business potential. However, these effects can be moderated by economic fluctuations, operational efficiency, and market perceptions. The study concludes that a balanced integration of strong financial performance and consistent sales growth is essential for stock valuation, offering practical insights for investors and corporate decision-makers.