With a price-to-earnings (or "P/E") ratio of 19.9x Shenzhen Capol International & Associatesco.,Ltd (SZSE:002949) may be sending bullish signals at the moment, given that almost half of all companies in China have P/E ratios greater than 28x and even P/E's higher than 51x are not unusual. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.
The recently shrinking earnings for Shenzhen Capol International & Associatesco.Ltd have been in line with the market. One possibility is that the P/E is low because investors think the company's earnings may begin to slide even faster. You'd much rather the company wasn't bleeding earnings if you still believe in the business. At the very least, you'd be hoping that earnings don't fall off a cliff if your plan is to pick up some stock while it's out of favour.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Shenzhen Capol International & Associatesco.Ltd.
How Is Shenzhen Capol International & Associatesco.Ltd's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as low as Shenzhen Capol International & Associatesco.Ltd's is when the company's growth is on track to lag the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 1.5%. This means it has also seen a slide in earnings over the longer-term as EPS is down 32% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Turning to the outlook, the next year should generate growth of 99% as estimated by the six analysts watching the company. Meanwhile, the rest of the market is forecast to only expand by 42%, which is noticeably less attractive.
With this information, we find it odd that Shenzhen Capol International & Associatesco.Ltd is trading at a P/E lower than the market. It looks like most investors are not convinced at all that the company can achieve future growth expectations.
The Final Word
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.
Our examination of Shenzhen Capol International & Associatesco.Ltd's analyst forecasts revealed that its superior earnings outlook isn't contributing to its P/E anywhere near as much as we would have predicted. When we see a strong earnings outlook with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. At least price risks look to be very low, but investors seem to think future earnings could see a lot of volatility.
You should always think about risks. Case in point, we've spotted 1 warning sign for Shenzhen Capol International & Associatesco.Ltd you should be aware of.
Of course, you might also be able to find a better stock than Shenzhen Capol International & Associatesco.Ltd. 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.
市盈率(或 “市盈率”)爲深圳Capol International & Associatesco的19.9倍。, Ltd(深圳證券交易所:002949)目前可能正在發出看漲信號,因爲幾乎一半的中國公司的市盈率超過28倍,甚至市盈率高於51倍也並不罕見。但是,市盈率之低可能是有原因的,需要進一步調查以確定其是否合理。
深圳Capol International & Associatesco.Ltd最近收益的萎縮與市場一致。一種可能性是市盈率很低,因爲投資者認爲該公司的收益可能會開始更快地下滑。如果你仍然相信公司的業務,你寧願公司不流失收益。至少,如果你的計劃是在股票失寵的時候買入一些股票,那麼你希望收益不會從懸崖上掉下來。
如果你想了解分析師對未來的預測,你應該查看我們關於深圳Capol International & Associatesco.Ltd的免費報告。
深圳Capol International & Associatesco.Ltd的增長趨勢如何?
只有當公司的增長有望落後於市場時,你才能真正放心地看到市盈率低至深圳Capol International & Associatesco.Ltd的市盈率。
有了這些信息,我們覺得奇怪的是,深圳Capol International & Associatesco.Ltd的市盈率低於市場。看來大多數投資者根本不相信公司能夠實現未來的增長預期。
最後一句話
僅使用市盈率來確定是否應該出售股票是不明智的,但它可以作爲公司未來前景的實用指南。
我們對深圳Capol International & Associatesco.Ltd分析師預測的審查顯示,其優異的盈利前景對市盈率的貢獻沒有我們預期的那麼大。當我們看到強勁的盈利前景和快於市場的增長速度時,我們假設潛在風險可能會給市盈率帶來巨大壓力。至少價格風險看起來很低,但投資者似乎認爲未來的收益可能會出現很大的波動。
你應該時刻考慮風險。舉個例子,我們發現了你應該注意的深圳Capol International & Associatesco.Ltd的1個警告標誌。
當然,你也可以找到比深圳Capol International & Associatesco.Ltd更好的股票,因此,你不妨免費查看其他市盈率合理且收益增長強勁的公司。