Should you buy Veda Group Ltd today?

Veda Group Ltd's (ASX:VED) shares might not look cheap, but they could deliver handsome returns for investors who take the chance.

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Veda Group Ltd (ASX: VED) is a leading data analytics business with an estimated 85% market share of Australia's consumer credit bureau. While the company only listed on the ASX late last year, it has a rich history for growing revenues and earnings and has proven its resilience through even the toughest economic conditions.

It's been a solid couple of weeks for the stock. Now trading at $2.34, it has risen nearly 8% since mid-October, although it's still trading at an 8.2% discount compared to its all-time high, recorded in September following a bumper earnings report.

Should you buy?

Veda Group operates in a very promising industry. The GFC highlighted just how important it is for businesses to ensure that their customers will be able to repay their debts while the recent introduction of the Comprehensive Credit Reporting regime will allow Veda to continue enhancing its product offering – thus improving its customers' decision-making capabilities.

As it stands, the shares are trading on a projected P/E ratio of 25.4 times earnings, so an investment in Veda won't be a bargain. Yet I believe the price is still quite justifiable considering the company's strong earnings growth potential – especially when its fantastic track record is taken into account.

Motley Fool contributor Ryan Newman owns shares in Veda Group Ltd.

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