Installed Building Products, Inc.'s (NYSE:IBP) price-to-earnings (or "P/E") ratio of 24.2x 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.
Installed Building Products 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. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
NYSE:IBP Price to Earnings Ratio vs Industry June 18th 2024 Keen to find out how analysts think Installed Building Products' future stacks up against the industry? In that case, our free report is a great place to start.
Is There Enough Growth For Installed Building Products?
Installed Building Products' P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market.
If we review the last year of earnings growth, the company posted a worthy increase of 5.6%. Pleasingly, EPS has also lifted 164% in aggregate from three years ago, partly thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing earnings over that time.
Turning to the outlook, the next year should generate growth of 12% as estimated by the twelve analysts watching the company. Meanwhile, the rest of the market is forecast to expand by 12%, which is not materially different.
In light of this, it's curious that Installed Building Products' P/E sits above the majority of other companies. It seems most investors are ignoring the fairly average growth expectations and are willing to pay up for exposure to the stock. These shareholders may be setting themselves up for disappointment if the P/E falls to levels more in line with the growth outlook.
What We Can Learn From Installed Building Products' P/E?
We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
Our examination of Installed Building Products' analyst forecasts revealed that its market-matching earnings outlook isn't impacting its high P/E as much as we would have predicted. When we see an average earnings outlook with market-like growth, we suspect the share price is at risk of declining, sending the high P/E lower. This places shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
You should always think about risks. Case in point, we've spotted 2 warning signs for Installed Building Products you should be aware of.
If you're unsure about the strength of Installed Building Products' 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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Installed Building Products, Inc.(纽交所:IBP)的市盈率(或 "P/E")为24.2倍,与美国市场半数公司的市盈率(低于16倍)和甚至低于9倍的市盈率相比,似乎是一个卖出的股票。 然而,市盈率可能存在某些原因,并需要进一步调查以确定是否合理。
Installed Building Products最近确实表现得不错,因为其盈利增长保持为正,而大多数其他公司的盈利却在倒退。看起来,许多人都期望该公司继续对抗整个市场的逆境,这增加了投资者为该公司的股票付出高昂价格的意愿。很希望如此,否则您将因为毫无特定原因而支付了一个相当庞大的价格。
纽交所:IBP市盈率与行业板块比较,截至2024年6月18日想知道分析师如何看待Installed Building Products未来与行业的竞争?在这种情况下,我们的免费报告是一个很好的起点。
Installed Building Products是否有足够的成长空间?
Installed Building Products的市盈率对于预计实现稳定增长并表现优于市场的公司来说很典型。
考虑到这一点,Installed Building Products的市盈率高于其他大多数公司,这似乎有些奇怪。似乎大多数投资者忽略了这些只能平凡增长的预期,并且愿意为这只股票支付高价。如果市盈率下跌并接近该公司的成长预期,这些股东可能会让自己失望。
从Installed Building Products的市盈率中我们可以学到什么?
我们会说市盈率的力量不是作为估值工具,而是用于衡量当前投资者的情绪和未来预期。
我们对Installed Building Products的分析师预测进行检测后发现,市场匹配的盈利前景并没有像我们预计的那样影响到其高市盈率。当我们看到市场前景普通的平均盈利增长时,我们怀疑股价面临着下降风险,并且高市盈率也会随之下降。这将使股东的投资面临风险,而潜在投资者则面临支付不必要溢价的风险。
你应该始终考虑风险。例如,我们发现Installed Building Products存在2个警示信号,您应该注意。
如果您对Installed Building Products的业务实力不确定,为什么不探索我们的互动型股票列表,以查看其他您可能错过的公司具有稳健的业务基础。