S-Enjoy Service Group Co., Limited (HKG:1755) shares have had a really impressive month, gaining 27% after a shaky period beforehand. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 41% in the last twelve months.
Even after such a large jump in price, S-Enjoy Service Group may still be sending bullish signals at the moment with its price-to-earnings (or "P/E") ratio of 5.2x, since almost half of all companies in Hong Kong have P/E ratios greater than 10x and even P/E's higher than 19x are not unusual. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.
Recent times have been advantageous for S-Enjoy Service Group as its earnings have been rising faster than most other companies. It might be that many expect the strong earnings performance to degrade substantially, which has repressed the P/E. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
SEHK:1755 Price to Earnings Ratio vs Industry April 26th 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on S-Enjoy Service Group.
How Is S-Enjoy Service Group's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as low as S-Enjoy Service Group's is when the company's growth is on track to lag the market.
Taking a look back first, we see that the company managed to grow earnings per share by a handy 4.9% last year. Still, lamentably EPS has fallen 7.6% in aggregate from three years ago, which is disappointing. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Turning to the outlook, the next three years should generate growth of 8.7% per annum as estimated by the nine analysts watching the company. Meanwhile, the rest of the market is forecast to expand by 15% each year, which is noticeably more attractive.
With this information, we can see why S-Enjoy Service Group is trading at a P/E lower than the market. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Key Takeaway
Despite S-Enjoy Service Group's shares building up a head of steam, its P/E still lags most other companies. 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.
As we suspected, our examination of S-Enjoy Service Group's analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. It's hard to see the share price rising strongly in the near future under these circumstances.
There are also other vital risk factors to consider before investing and we've discovered 1 warning sign for S-Enjoy Service Group that you should be aware of.
If these risks are making you reconsider your opinion on S-Enjoy Service Group, explore our interactive list of high quality stocks to get an idea of what else is out there.
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S-Enjoy Service Group Co., Limited(HKG: 1755)的股價經歷了一個非常令人印象深刻的月份,在經歷了動盪時期之後上漲了27%。並非所有股東都會感到歡欣鼓舞,因爲股價在過去十二個月中仍然下跌了令人失望的41%。
即使在價格大幅上漲之後,S-Enjoy Service Group目前仍可能以5.2倍的市盈率(或 “市盈率”)發出看漲信號,因爲幾乎一半的香港公司的市盈率大於10倍,甚至市盈率高於19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。
最近對S-Enjoy Service Group來說是有利的,因爲其收益增長速度快於大多數其他公司。許多人可能預計強勁的盈利表現將大幅下滑,這抑制了市盈率。如果不是,那麼現有股東有理由對股價的未來走向持相當樂觀的態度。