Daphne International Holdings Limited (HKG:210) shares have had a really impressive month, gaining 33% after a shaky period beforehand. The last 30 days bring the annual gain to a very sharp 73%.
Although its price has surged higher, given about half the companies in Hong Kong have price-to-earnings ratios (or "P/E's") above 10x, you may still consider Daphne International Holdings as an attractive investment with its 7x P/E ratio. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.
Daphne International Holdings 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.
SEHK:210 Price to Earnings Ratio vs Industry July 26th 2024 We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Daphne International Holdings' earnings, revenue and cash flow.
Does Growth Match The Low P/E?
In order to justify its P/E ratio, Daphne International Holdings would need to produce sluggish growth that's trailing the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 65% last year. Still, EPS has barely risen at all from three years ago in total, which is not ideal. Therefore, it's fair to say that earnings growth has been inconsistent recently for the company.
This is in contrast to the rest of the market, which is expected to grow by 19% over the next year, materially higher than the company's recent medium-term annualised growth rates.
In light of this, it's understandable that Daphne International Holdings' P/E sits below the majority of other companies. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the bourse.
The Key Takeaway
Daphne International Holdings' stock might have been given a solid boost, but its P/E certainly hasn't reached any great heights. 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 Daphne International Holdings maintains its low P/E on the weakness of its recent three-year growth being lower than the wider market forecast, as expected. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. If recent medium-term earnings trends continue, it's hard to see the share price rising strongly in the near future under these circumstances.
Plus, you should also learn about these 4 warning signs we've spotted with Daphne International Holdings.
Of course, you might also be able to find a better stock than Daphne International Holdings. 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.
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大股东实施增持计划,股票表现出色,近一个月上涨33%,全年涨幅达到73%。
Daphne International Holdings的市盈率为7倍,相比香港市场约一半以上公司的市盈率都超过了10倍,尽管其股价已经上涨,但仍可能被认为是一个有吸引力的投资。然而,市盈率可能之所以低,需要进一步调查确定是否合理。
最近,Daphne International Holdings的业绩增长非常迅速。市盈率之所以低可能是因为投资者认为其强劲的业绩增长实际上可能会表现不如大市。如果你喜欢这家公司,你希望这不是真的,这样你就有可能在它不被关注的时候买进。
SEHK:210市盈率与行业板块对比,于2024年7月26日。我们没有分析师的预测,但你可以通过查看我们的免费报告来了解Daphne International Holdings的收益、营业收入和现金流等最近趋势,以为公司的未来做准备。
增长是否与低市盈率相匹配?
为了证明其市盈率合理,Daphne International Holdings需要创造落后于市场的缓慢增长。
回顾一下去年,我们发现Daphne International Holdings的每股收益增长了65%,但总体上EPS从三年前几乎没有上升,这不是理想的。因此,可以说公司的收益增长最近一直不稳定。
从这个角度看,Daphne International Holdings的市盈率低于大多数其他公司,这是可以理解的。显然,许多股东不愿意持有他们认为将继续落后于市场的东西。
重要提示
Daphne International Holdings的股价可能得到了实质性的提升,但是其市盈率显然没有达到任何很高的高度。但仅仅使用市盈率来确定是否应该卖出你的股票是不明智的,然而,它可以是公司未来前景的实用指南。
我们已经确定Daphne International Holdings保持其低市盈率的原因是其近三年增长低于更广泛市场预测水平,正如预期的那样。在这个阶段,投资者认为,若不出现盈利改善,很难有足够的潜力来证明一个更高的市盈率。如果最近的中期利润趋势继续下去,在这些情况下,很难看到股价在短期内大幅上涨。
此外,你还应该了解这4个我们发现的有关Daphne International Holdings的警告信号。
当然,你可以找到比Daphne International Holdings更好的股票,所以你可能想看看这个免费的文章,其中介绍了其他一些市盈率合理并且业绩表现强劲的公司。