Sichuan Qiaoyuan Gas Co.,Ltd (SZSE:301286) shares have had a really impressive month, gaining 29% after a shaky period beforehand. Longer-term shareholders would be thankful for the recovery in the share price since it's now virtually flat for the year after the recent bounce.
After such a large jump in price, given close to half the companies in China have price-to-earnings ratios (or "P/E's") below 34x, you may consider Sichuan Qiaoyuan GasLtd as a stock to avoid entirely with its 68x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
For instance, Sichuan Qiaoyuan GasLtd's receding earnings in recent times would have to be some food for thought. One possibility is that the P/E is high because investors think the company will still do enough to outperform the broader market in the near future. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Check out our latest analysis for Sichuan Qiaoyuan GasLtd
SZSE:301286 Price Based on Past Earnings November 8th 2022 Although there are no analyst estimates available for Sichuan Qiaoyuan GasLtd, take a look at this
free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
How Is Sichuan Qiaoyuan GasLtd's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as steep as Sichuan Qiaoyuan GasLtd's is when the company's growth is on track to outshine the market decidedly.
Retrospectively, the last year delivered a frustrating 35% decrease to the company's bottom line. The last three years don't look nice either as the company has shrunk EPS by 56% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
In contrast to the company, the rest of the market is expected to grow by 45% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
With this information, we find it concerning that Sichuan Qiaoyuan GasLtd is trading at a P/E higher than the market. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a very good chance existing shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the recent negative growth rates.
The Final Word
Shares in Sichuan Qiaoyuan GasLtd have built up some good momentum lately, which has really inflated its P/E. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
Our examination of Sichuan Qiaoyuan GasLtd revealed its shrinking earnings over the medium-term aren't impacting its high P/E anywhere near as much as we would have predicted, given the market is set to grow. When we see earnings heading backwards and underperforming the market forecasts, we suspect the share price is at risk of declining, sending the high P/E lower. If recent medium-term earnings trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Plus, you should also learn about these 2 warning signs we've spotted with Sichuan Qiaoyuan GasLtd (including 1 which is a bit unpleasant).
You might be able to find a better investment than Sichuan Qiaoyuan GasLtd. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a P/E below 20x (but have proven they can grow earnings).
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
四川侨源燃气有限责任公司(SZSE：301286)在经历了一段不稳定的时期后，股票经历了令人印象深刻的一个月，上涨了29%。较长期的股东将对股价的回升感到欣慰，因为在最近的反弹之后，股价在一年内几乎持平。
在股价大幅上涨后，考虑到中国近一半的公司的市盈率(或“市盈率”)低于34倍，你可能会认为四川侨源燃气有限公司是一只完全避免68倍市盈率的股票。然而，仅仅从表面上看待市盈率是不明智的，因为可能会有一个解释，为什么它如此之高。
例如，四川侨源燃气股份有限公司近期收益下滑，这肯定值得深思。一种可能性是，市盈率很高，因为投资者认为该公司在不久的将来仍将采取足够的措施来跑赢大盘。你真的希望如此，否则你会无缘无故地付出相当大的代价。
查看我们对四川侨源燃气有限公司的最新分析
SZSE：301286基于过去收益的价格2022年11月8日尽管没有分析师对四川侨源天然气有限公司的估计，但看看这个
免费丰富的数据可视化，看看公司的收益、收入和现金流是如何堆积的。
四川侨源燃气发展趋势如何？
只有当四川侨源天然气股份有限公司的市盈率如此之高时，你才会真正放心地看到它的市盈率，那就是该公司的增长将明显超过市场。
回顾过去一年，该公司的利润令人沮丧地下降了35%。过去三年的情况也不妙，该公司每股收益总计缩水了56%。因此，股东们会对中期盈利增长率感到悲观。
与该公司形成鲜明对比的是，该市场的其他部分预计明年将增长45%，这确实让人对该公司最近中期收益的下降有了正确的认识。
有了这些信息，我们发现四川侨源天然气有限公司的市盈率高于市场。似乎大多数投资者都忽视了最近糟糕的增长率，并希望该公司的业务前景有所好转。如果市盈率下降到与最近负增长更一致的水平，现有股东很有可能会让自己未来感到失望。
最后的结论
四川侨源燃气股份有限公司的股票最近出现了一些良好的势头，这确实抬高了其市盈率。有人认为，在某些行业中，市盈率是衡量价值的次要指标，但它可以成为一个强大的商业信心指标。
我们对四川侨源天然气有限公司的调查显示，考虑到市场的增长，该公司中期收益的缩水对其高市盈率的影响并不像我们预期的那样大。当我们看到盈利出现倒退，表现逊于市场预期时，我们怀疑股价有下跌的风险，导致高市盈率走低。如果近期的中期盈利趋势持续下去，将使股东的投资面临重大风险，潜在投资者面临支付过高溢价的危险。
另外，你还应该了解这些我们在四川侨源燃气有限公司发现了2个警告信号(包括1，这有点令人不快)。
你也许能找到比四川侨源燃气股份有限公司更好的投资。如果您想要选择可能的候选人，请查看以下内容免费令人感兴趣的市盈率低于20倍的公司名单(但已证明它们可以增加收益)。
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本文由Simply Wall St.撰写，具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论，我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议，也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意，我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。
