Guangdong Provincial Expressway Development Co., Ltd.'s (SZSE:200429) price-to-earnings (or "P/E") ratio of 6.9x might make it look like a strong buy right now compared to the market in China, where around half of the companies have P/E ratios above 35x and even P/E's above 62x are quite common. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so limited.
Guangdong Provincial Expressway Development has been struggling lately as its earnings have declined faster than most other companies. The P/E is probably low because investors think this poor earnings performance isn't going to improve at all. If you still like the company, you'd want its earnings trajectory to turn around before making any decisions. Or at the very least, you'd be hoping the earnings slide doesn't get any worse if your plan is to pick up some stock while it's out of favour.
See our latest analysis for Guangdong Provincial Expressway Development
SZSE:200429 Price Based on Past Earnings December 6th 2022 If you'd like to see what analysts are forecasting going forward, you should check out our
free report on Guangdong Provincial Expressway Development.
What Are Growth Metrics Telling Us About The Low P/E?
Guangdong Provincial Expressway Development's P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 20%. The last three years don't look nice either as the company has shrunk EPS by 4.5% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
Looking ahead now, EPS is anticipated to climb by 16% during the coming year according to the twin analysts following the company. That's shaping up to be materially lower than the 42% growth forecast for the broader market.
In light of this, it's understandable that Guangdong Provincial Expressway Development's P/E sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Final Word
We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
We've established that Guangdong Provincial Expressway Development maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances.
And what about other risks? Every company has them, and we've spotted 1 warning sign for Guangdong Provincial Expressway Development you should know about.
If you're unsure about the strength of Guangdong Provincial Expressway Development's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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广东省高速公路发展有限公司's(SZSE: 200429)市盈率(或 “市盈率”)为6.9倍,与中国市场相比,目前看上去像是一个强劲的买盘,中国约有一半的公司的市盈率超过35倍,甚至市盈率高于62倍也很常见。但是,仅按面值计算市盈率是不明智的,因为可以解释为什么市盈率如此有限。
由于收益的下降速度快于大多数其他公司,广东省高速公路发展公司最近一直处于困境。市盈率可能很低,因为投资者认为这种糟糕的收益表现根本不会改善。如果你仍然喜欢这家公司,那么在做出任何决定之前,你会希望其盈利轨迹得到扭转。或者至少,如果你的计划是在失宠的时候买入一些股票,你希望收益下滑不会变得更糟。
查看我们对广东省高速公路发展的最新分析
SZSE: 200429价格基于过去的2022年12月6日收益如果你想了解分析师对未来的预测,你应该查看我们关于广东省高速公路发展的免费报告。
关于低市盈率,增长指标告诉我们什么?
广东省高速公路开发公司的市盈率对于一家预计增长非常糟糕甚至收益下降的公司来说是典型的,更重要的是,其表现要比市场差得多。
如果我们回顾一下去年的收益,令人沮丧的是,该公司的利润下降了20%。过去三年看起来也不太好,因为该公司的每股收益总共缩减了4.5%。因此,不幸的是,我们必须承认,在此期间,该公司在增加收益方面做得不好。
关注该公司的两位分析师表示,展望未来,预计来年每股收益将增长16%。这将大大低于整个市场42%的增长预期。
有鉴于此,广东省高速公路开发公司的市盈率低于其他大多数公司是可以理解的。看来大多数投资者预计未来增长有限,只愿意为股票支付较少的金额。
最后一句话
我们可以说,市盈率的力量主要不是作为估值工具,而是衡量当前投资者情绪和未来预期。
我们已经确定,广东省高速公路发展保持低市盈率,原因是其预期的增长低于整个市场,其市盈率不如预期。在现阶段,投资者认为,收益改善的可能性不足以证明提高市盈率是合理的。在这种情况下,很难看到股价在不久的将来强劲上涨。
那其他风险呢?每家公司都有它们,我们发现了一个你应该知道的广东省高速公路发展的警告标志。
如果您不确定广东省高速公路发展公司的业务实力,为什么不浏览我们的互动股票清单,这些股票具有稳健的业务基本面,其中列出了您可能错过的其他一些公司的股票。
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Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。