Boot Barn Holdings, Inc. (NYSE:BOOT) shares have continued their recent momentum with a 25% gain in the last month alone. Looking back a bit further, it's encouraging to see the stock is up 71% in the last year.
Following the firm bounce in price, Boot Barn Holdings may be sending very bearish signals at the moment with a price-to-earnings (or "P/E") ratio of 26.6x, since almost half of all companies in the United States have P/E ratios under 16x and even P/E's lower than 9x are not unusual. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.
Recent times haven't been advantageous for Boot Barn Holdings as its earnings have been falling quicker 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. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Keen to find out how analysts think Boot Barn Holdings' future stacks up against the industry? In that case, our free report is a great place to start.
How Is Boot Barn Holdings' Growth Trending?
Boot Barn Holdings' P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than 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 15%. However, a few very strong years before that means that it was still able to grow EPS by an impressive 136% in total over the last three years. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Turning to the outlook, the next three years should generate growth of 14% per annum as estimated by the analysts watching the company. Meanwhile, the rest of the market is forecast to only expand by 10.0% per year, which is noticeably less attractive.
With this information, we can see why Boot Barn Holdings is trading at such a high P/E compared to the market. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Key Takeaway
Shares in Boot Barn Holdings 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 Boot Barn Holdings maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. Unless these conditions change, they will continue to provide strong support to the share price.
You should always think about risks. Case in point, we've spotted 1 warning sign for Boot Barn Holdings you should be aware of.
If these risks are making you reconsider your opinion on Boot Barn Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
Boot Barn Holdings(NYSE:BOOT)的股票已經持續上漲,僅在過去一個月內漲幅達25%。回顧過去一段時間,令人鼓舞的是,該股票在過去一年中上漲了71%。
價格反彈之後,Boot Barn Holdings目前可能正發送非常消極的信號,因爲其市盈率爲26.6倍,而美國近一半的公司市盈率都在16倍以下,甚至低於9倍的不是特別罕見。然而,市盈率可能之所以很高,是有原因的,需要進一步調查以確定是否合理。
最近對Boot Barn Holdings來說並不是太有利,因爲其收益比大多數其他公司下降得更快。一個可能的原因是,市盈率很高,因爲投資者認爲該公司將完全扭轉局面,並超過市場上的大多數公司。你真的希望如此,否則你會爲沒有特定原因支付相當高的價格。
想知道分析師如何看待Boot Barn Holdings未來與行業的對比嗎?如果是這樣,那麼我們的免費報告是一個很好的開始。
Boot Barn Holdings的增長趨勢如何?
Boot Barn Holdings的市盈率對於預計能夠提供非常強勁的增長,而且重要的是,表現將遠高於市場的公司來說是典型的。