MINISO Group Holding Limited's (NYSE:MNSO) price-to-earnings (or "P/E") ratio of 20.3x might make it look like a sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 16x and even P/E's below 9x are quite common. However, the P/E might be high for a reason and it requires further investigation to determine if it's justified.
MINISO Group Holding certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on MINISO Group Holding.
Does Growth Match The High P/E?
There's an inherent assumption that a company should outperform the market for P/E ratios like MINISO Group Holding's to be considered reasonable.
Taking a look back first, we see that the company grew earnings per share by an impressive 116% last year. However, the latest three year period hasn't been as great in aggregate as it didn't manage to provide any growth at all. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 18% per year over the next three years. That's shaping up to be materially higher than the 10% per annum growth forecast for the broader market.
In light of this, it's understandable that MINISO Group Holding's P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Bottom Line On MINISO Group Holding's P/E
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 MINISO Group Holding's analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.
Many other vital risk factors can be found on the company's balance sheet. Take a look at our free balance sheet analysis for MINISO Group Holding with six simple checks on some of these key factors.
It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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.
MINISO Group Holding Limited(纽约证券交易所代码:MNSO)的市盈率(或 “市盈率”)为20.3倍,与美国市场相比,目前可能看起来像卖出,美国约有一半公司的市盈率低于16倍,甚至市盈率低于9倍也很常见。但是,市盈率之高可能是有原因的,需要进一步调查以确定其是否合理。
MINISO Group Holding最近确实做得很好,因为其收益增长是正的,而大多数其他公司的收益却在倒退。看来许多人预计该公司将继续克服更广泛的市场逆境,这增加了投资者购买股票的意愿。如果不是,那么现有股东可能会对股价的可行性有些紧张。
如果你想了解分析师对未来的预测,你应该查看我们关于MINISO Group Holding的免费报告。
增长与高市盈率相匹配吗?
人们固有的假设是,如果像MINISO Group Holding这样的市盈率才算合理,公司的表现应该优于市场。