Despite an already strong run, Moso Power Supply Technology Co.,Ltd (SZSE:002660) shares have been powering on, with a gain of 27% in the last thirty days. The last 30 days bring the annual gain to a very sharp 55%.
Following the firm bounce in price, given close to half the companies in China have price-to-earnings ratios (or "P/E's") below 34x, you may consider Moso Power Supply TechnologyLtd as a stock to avoid entirely with its 56.6x 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 example, consider that Moso Power Supply TechnologyLtd's financial performance has been poor lately as its earnings have been in decline. 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.
View our latest analysis for Moso Power Supply TechnologyLtd
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Moso Power Supply TechnologyLtd's earnings, revenue and cash flow.
Does Growth Match The High P/E?
The only time you'd be truly comfortable seeing a P/E as steep as Moso Power Supply TechnologyLtd's is when the company's growth is on track to outshine the market decidedly.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 11%. The last three years don't look nice either as the company has shrunk EPS by 9.7% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Comparing that to the market, which is predicted to deliver 44% growth in the next 12 months, the company's downward momentum based on recent medium-term earnings results is a sobering picture.
With this information, we find it concerning that Moso Power Supply TechnologyLtd is trading at a P/E higher than the market. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. 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.
What We Can Learn From Moso Power Supply TechnologyLtd's P/E?
The strong share price surge has got Moso Power Supply TechnologyLtd's P/E rushing to great heights as well. 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.
Our examination of Moso Power Supply TechnologyLtd 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. Right now we are increasingly uncomfortable with the high P/E as this earnings performance is highly unlikely to support such positive sentiment for long. 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.
Having said that, be aware Moso Power Supply TechnologyLtd is showing 2 warning signs in our investment analysis, you should know about.
If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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有了这些信息,我们发现Moso Power Supply TechnologyLtd的交易市盈率高于市场。显然,该公司的许多投资者比最近所表示的要看涨得多,他们不愿意以任何价格抛售股票。如果市盈率降至更符合近期负增长率的水平,现有股东很有可能为未来的失望做好准备。
我们可以从摩索电源科技有限公司的市盈率中学到什么?
股价的强劲上涨使Moso Power Supply TechnologyLtd的市盈率也飙升至很高的水平。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。
我们对Moso Power Supply TechnologyLtd的审查显示,鉴于市场即将增长,其中期收益萎缩对其高市盈率的影响并没有我们预期的那么大。目前,我们对高市盈率越来越不满意,因为这种收益表现极不可能长期支撑这种积极情绪。如果最近的中期收益趋势继续下去,这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。
话虽如此,请注意,在我们的投资分析中,Moso Power Supply TechnologyLtd显示了两个警告信号,你应该知道。
如果你对市盈率感兴趣,你可能希望看到这批盈利增长强劲、市盈率低的免费公司。
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