Pop Mart International Group Limited (HKG:9992) shares have had a really impressive month, gaining 25% after a shaky period beforehand. While recent buyers may be laughing, long-term holders might not be as pleased since the recent gain only brings the stock back to where it started a year ago.
Since its price has surged higher, Pop Mart International Group may be sending very bearish signals at the moment with a price-to-earnings (or "P/E") ratio of 43x, since almost half of all companies in Hong Kong have P/E ratios under 8x and even P/E's lower than 5x are not unusual. 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.
Pop Mart International Group has been struggling lately as its earnings have declined faster than most other companies. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. If not, then existing shareholders may be very nervous about the viability of the share price.
SEHK:9992 Price to Earnings Ratio vs Industry March 4th 2024 Keen to find out how analysts think Pop Mart International Group's future stacks up against the industry? In that case, our free report is a great place to start.
What Are Growth Metrics Telling Us About The High P/E?
In order to justify its P/E ratio, Pop Mart International Group would need to produce outstanding growth well in excess of the market.
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 24%. Regardless, EPS has managed to lift by a handy 13% in aggregate from three years ago, thanks to the earlier period of growth. Although it's been a bumpy ride, it's still fair to say the earnings growth recently has been mostly respectable for the company.
Looking ahead now, EPS is anticipated to climb by 40% per year during the coming three years according to the analysts following the company. With the market only predicted to deliver 16% per annum, the company is positioned for a stronger earnings result.
In light of this, it's understandable that Pop Mart International Group's P/E sits above the majority of other companies. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From Pop Mart International Group's P/E?
Shares in Pop Mart International Group have built up some good momentum lately, which has really inflated its P/E. 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.
We've established that Pop Mart International Group maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
Many other vital risk factors can be found on the company's balance sheet. Our free balance sheet analysis for Pop Mart International Group with six simple checks will allow you to discover any risks that could be an issue.
If you're unsure about the strength of Pop Mart International Group's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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Pop Mart International Group Limited(HKG: 9992)的股价经历了一个非常令人印象深刻的月份,在经历了动荡时期之后上涨了25%。尽管最近的买家可能在笑,但长期持有者可能不那么高兴,因为最近的涨势只会使该股恢复到一年前的起点。
由于其价格飙升,Pop Mart International Group目前可能会发出非常看跌的信号,市盈率(或 “市盈率”)为43倍,因为几乎一半的香港公司的市盈率低于8倍,即使市盈率低于5倍也并不罕见。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如此之高。
Pop Mart International Group最近一直处于困境,因为其收益下降速度快于大多数其他公司。一种可能性是市盈率居高不下,因为投资者认为该公司将彻底扭转局面,加速超越市场上的大多数其他公司。如果不是,那么现有股东可能会对股价的可行性感到非常担忧。
SEHK: 9992 对比行业的市盈率 2024 年 3 月 4 日 想了解分析师如何看待Pop Mart International Group的未来与该行业的对立吗?在这种情况下,我们的免费报告是一个很好的起点。
关于高市盈率,增长指标告诉我们什么?
为了证明其市盈率是合理的,Pop Mart International Group需要实现远远超过市场的出色增长。