Easyhome New Retail Group Corporation Limited's (SZSE:000785) price-to-earnings (or "P/E") ratio of 12.8x might make it look like a strong buy right now compared to the market in China, where around half of the companies have P/E ratios above 30x and even P/E's above 57x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
Easyhome New Retail Group could be doing better as its earnings have been going backwards lately while most other companies have been seeing positive earnings growth. The P/E is probably low because investors think this poor earnings performance isn't going to get any better. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.
SZSE:000785 Price to Earnings Ratio vs Industry June 20th 2024 Want the full picture on analyst estimates for the company? Then our free report on Easyhome New Retail Group will help you uncover what's on the horizon.
Does Growth Match The Low P/E?
In order to justify its P/E ratio, Easyhome New Retail Group would need to produce anemic growth that's substantially trailing the market.
Retrospectively, the last year delivered a frustrating 21% decrease to the company's bottom line. As a result, earnings from three years ago have also fallen 30% overall. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Shifting to the future, estimates from the eight analysts covering the company suggest earnings should grow by 10.0% per year over the next three years. That's shaping up to be materially lower than the 25% per year growth forecast for the broader market.
With this information, we can see why Easyhome New Retail Group is trading at a P/E lower than the market. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.
What We Can Learn From Easyhome New Retail Group's P/E?
Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
We've established that Easyhome New Retail Group maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected. 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.
And what about other risks? Every company has them, and we've spotted 2 warning signs for Easyhome New Retail Group you should know about.
Of course, you might also be able to find a better stock than Easyhome New Retail Group. 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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Easyhome New Retail Group Corporation Limited (SZSE:000785)的市盈率爲12.8倍,與中國市場上大約一半的公司的市盈率超過30倍,甚至市盈率超過57倍相當普遍相比,現在看起來可能是一個強勁的買入信號。然而,我們需要深入挖掘,以判斷高度降低的市盈率是否有合理的基礎。
Easyhome New Retail Group的盈利情況最近一直在倒退,而大多數其他公司一直在實現盈利增長,因此不可能獲得高市盈率,因爲投資者認爲這種不良盈利表現不會有任何改善。如果是這種情況,那麼現有股東可能很難對股價未來的發展方向感到興奮。
SZSE: 000785市盈率與行業板塊比較於2024年6月20日想了解該公司分析師預估的完整情況嗎?那麼,我們有關於Easyhome New Retail Group的免費報告可以幫助您了解未來的情況。