Boot Barn Holdings, Inc.'s (NYSE:BOOT) price-to-earnings (or "P/E") ratio of 14.4x might make it look like a buy right now compared to the market in the United States, where around half of the companies have P/E ratios above 17x and even P/E's above 33x 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 limited.
Recent times haven't been advantageous for Boot Barn Holdings as its earnings have been falling quicker than most other companies. It seems that many are expecting the dismal earnings performance to persist, which has repressed the P/E. You'd much rather the company wasn't bleeding earnings if you still believe in the business. If not, then existing shareholders will probably struggle to get excited about the future direction of the share price.
View our latest analysis for Boot Barn Holdings
NYSE:BOOT Price to Earnings Ratio vs Industry January 2nd 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on Boot Barn Holdings.
What Are Growth Metrics Telling Us About The Low P/E?
There's an inherent assumption that a company should underperform the market for P/E ratios like Boot Barn Holdings' to be considered reasonable.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 13%. Even so, admirably EPS has lifted 328% in aggregate from three years ago, notwithstanding the last 12 months. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 6.2% per year over the next three years. Meanwhile, the rest of the market is forecast to expand by 13% each year, which is noticeably more attractive.
With this information, we can see why Boot Barn Holdings is trading at a P/E lower than the market. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.
The Key Takeaway
Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
As we suspected, our examination of Boot Barn Holdings' analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.
The company's balance sheet is another key area for risk analysis. Our free balance sheet analysis for Boot Barn Holdings with six simple checks will allow you to discover any risks that could be an issue.
If you're unsure about the strength of Boot Barn Holdings' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
Boot Barn Holdings, Inc.s(纽约证券交易所代码:BOOT)市盈率(或 “市盈率”)为14.4倍,与美国市场相比,目前可能看起来像买入。在美国,约有一半公司的市盈率高于17倍,甚至市盈率超过33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有限。
最近对Boot Barn Holdings来说并不是有利的,因为其收益的下降速度比大多数其他公司快。看来许多人预计惨淡的盈利表现将持续下去,这抑制了市盈率。如果你仍然相信该业务,你宁愿公司不流失收益。如果不是,那么现有股东可能很难对股价的未来走向感到兴奋。
查看我们对 Boot Barn Holdings 的最新分析
纽约证券交易所:BOOT对比行业的市盈率 2024 年 1 月 2 日 如果你想了解分析师对未来的预测,你应该查看我们关于Boot Barn Holdings的免费报告。
关于低市盈率,增长指标告诉我们什么?
人们固有的假设是,如果像Boot Barn Holdings这样的市盈率被认为是合理的,公司的表现应该低于市场。