With a price-to-earnings (or "P/E") ratio of 19.9x Shenzhen Capol International & Associatesco.,Ltd (SZSE:002949) may be sending bullish signals at the moment, given that almost half of all companies in China have P/E ratios greater than 28x and even P/E's higher than 51x are not unusual. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.
The recently shrinking earnings for Shenzhen Capol International & Associatesco.Ltd have been in line with the market. One possibility is that the P/E is low because investors think the company's earnings may begin to slide even faster. You'd much rather the company wasn't bleeding earnings if you still believe in the business. At the very least, you'd be hoping that earnings don't fall off a cliff if your plan is to pick up some stock while it's out of favour.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Shenzhen Capol International & Associatesco.Ltd.
How Is Shenzhen Capol International & Associatesco.Ltd's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as low as Shenzhen Capol International & Associatesco.Ltd's is when the company's growth is on track to lag the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 1.5%. This means it has also seen a slide in earnings over the longer-term as EPS is down 32% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Turning to the outlook, the next year should generate growth of 99% as estimated by the six analysts watching the company. Meanwhile, the rest of the market is forecast to only expand by 42%, which is noticeably less attractive.
With this information, we find it odd that Shenzhen Capol International & Associatesco.Ltd is trading at a P/E lower than the market. It looks like most investors are not convinced at all that the company can achieve future growth expectations.
The Final Word
Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
Our examination of Shenzhen Capol International & Associatesco.Ltd's analyst forecasts revealed that its superior earnings outlook isn't contributing to its P/E anywhere near as much as we would have predicted. When we see a strong earnings outlook with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. At least price risks look to be very low, but investors seem to think future earnings could see a lot of volatility.
You should always think about risks. Case in point, we've spotted 1 warning sign for Shenzhen Capol International & Associatesco.Ltd you should be aware of.
Of course, you might also be able to find a better stock than Shenzhen Capol International & Associatesco.Ltd. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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.
市盈率(或 “市盈率”)为深圳Capol International & Associatesco的19.9倍。, Ltd(深圳证券交易所:002949)目前可能正在发出看涨信号,因为几乎一半的中国公司的市盈率超过28倍,甚至市盈率高于51倍也并不罕见。但是,市盈率之低可能是有原因的,需要进一步调查以确定其是否合理。
深圳Capol International & Associatesco.Ltd最近收益的萎缩与市场一致。一种可能性是市盈率很低,因为投资者认为该公司的收益可能会开始更快地下滑。如果你仍然相信公司的业务,你宁愿公司不流失收益。至少,如果你的计划是在股票失宠的时候买入一些股票,那么你希望收益不会从悬崖上掉下来。
如果你想了解分析师对未来的预测,你应该查看我们关于深圳Capol International & Associatesco.Ltd的免费报告。
深圳Capol International & Associatesco.Ltd的增长趋势如何?
只有当公司的增长有望落后于市场时,你才能真正放心地看到市盈率低至深圳Capol International & Associatesco.Ltd的市盈率。
有了这些信息,我们觉得奇怪的是,深圳Capol International & Associatesco.Ltd的市盈率低于市场。看来大多数投资者根本不相信公司能够实现未来的增长预期。
最后一句话
仅使用市盈率来确定是否应该出售股票是不明智的,但它可以作为公司未来前景的实用指南。
我们对深圳Capol International & Associatesco.Ltd分析师预测的审查显示,其优异的盈利前景对市盈率的贡献没有我们预期的那么大。当我们看到强劲的盈利前景和快于市场的增长速度时,我们假设潜在风险可能会给市盈率带来巨大压力。至少价格风险看起来很低,但投资者似乎认为未来的收益可能会出现很大的波动。
你应该时刻考虑风险。举个例子,我们发现了你应该注意的深圳Capol International & Associatesco.Ltd的1个警告标志。
当然,你也可以找到比深圳Capol International & Associatesco.Ltd更好的股票,因此,你不妨免费查看其他市盈率合理且收益增长强劲的公司。