The Senci Electric Machinery Co.,Ltd. (SHSE:603109) share price has fared very poorly over the last month, falling by a substantial 31%. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 31% in that time.
Since its price has dipped substantially, given about half the companies in China have price-to-earnings ratios (or "P/E's") above 27x, you may consider Senci Electric MachineryLtd as a highly attractive investment with its 9.3x P/E ratio. However, the P/E might be quite low for a reason and it requires further investigation to determine if it's justified.
Senci Electric MachineryLtd certainly has been doing a great job lately as it's been growing earnings at a really rapid pace. One possibility is that the P/E is low because investors think this strong earnings growth might actually underperform the broader market in the near future. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
SHSE:603109 Price to Earnings Ratio vs Industry February 5th 2024 Although there are no analyst estimates available for Senci Electric MachineryLtd, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
How Is Senci Electric MachineryLtd's Growth Trending?
In order to justify its P/E ratio, Senci Electric MachineryLtd would need to produce anemic growth that's substantially trailing the market.
Retrospectively, the last year delivered an exceptional 34% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 90% in total over the last three years. So we can start by confirming that the company has done a great job of growing earnings over that time.
Comparing that to the market, which is predicted to deliver 41% growth in the next 12 months, the company's momentum is weaker based on recent medium-term annualised earnings results.
With this information, we can see why Senci Electric MachineryLtd is trading at a P/E lower than the market. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the bourse.
What We Can Learn From Senci Electric MachineryLtd's P/E?
Having almost fallen off a cliff, Senci Electric MachineryLtd's share price has pulled its P/E way down as well. While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
As we suspected, our examination of Senci Electric MachineryLtd revealed its three-year earnings trends are contributing to its low P/E, given they look worse than current market expectations. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.
And what about other risks? Every company has them, and we've spotted 1 warning sign for Senci Electric MachineryLtd you should know about.
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
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由于Senci Electric MachineryLtd的价格已大幅下跌,鉴于中国约有一半的公司的市盈率(或 “市盈率”)超过27倍,您可以将Senci Electric MachineryLtd的市盈率视为具有9.3倍市盈率的极具吸引力的投资。但是,市盈率可能很低是有原因的,需要进一步调查以确定其是否合理。
Senci Electric MachineryLtd最近确实做得很好,因为它的收益增长非常快。一种可能性是市盈率很低,因为投资者认为这种强劲的收益增长在不久的将来实际上可能低于整个市场。如果你喜欢这家公司,你希望情况并非如此,这样你就有可能在它失宠的时候买入一些股票。
Senci Electric MachineryLtd的股价几乎跌下了悬崖,市盈率也大幅下跌。尽管市盈率不应该成为决定你是否买入股票的决定性因素,但它是衡量收益预期的有力晴雨表。
正如我们所怀疑的那样,我们对Senci Electric MachineryLtd的审查显示,其三年收益趋势是其市盈率低的原因,因为这些趋势看起来不如当前的市场预期。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。除非最近的中期状况有所改善,否则它们将继续构成股价在这些水平附近的障碍。
那其他风险呢?每家公司都有它们,我们发现了你应该知道的 Senci Electric MachineryLtd 的1个警告标志。