When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 17x, you may consider Warrior Met Coal, Inc. (NYSE:HCC) as a highly attractive investment with its 7x P/E ratio. However, the P/E might be quite low for a reason and it requires further investigation to determine if it's justified.
Warrior Met Coal has been struggling lately as its earnings have declined faster than most other companies. It seems that many are expecting the dismal earnings performance to persist, which has repressed the P/E. If you still like the company, you'd want its earnings trajectory to turn around before making any decisions. Or at the very least, you'd be hoping the earnings slide doesn't get any worse if your plan is to pick up some stock while it's out of favour.
View our latest analysis for Warrior Met Coal
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Warrior Met Coal.
Does Growth Match The Low P/E?
Warrior Met Coal's P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
Retrospectively, the last year delivered a frustrating 34% decrease to the company's bottom line. However, a few very strong years before that means that it was still able to grow EPS by an impressive 2,262% 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 0.2% per year as estimated by the four analysts watching the company. That's shaping up to be materially lower than the 12% per year growth forecast for the broader market.
In light of this, it's understandable that Warrior Met Coal's P/E sits below the majority of other companies. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.
What We Can Learn From Warrior Met Coal's P/E?
It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
As we suspected, our examination of Warrior Met Coal's analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances.
Plus, you should also learn about these 6 warning signs we've spotted with Warrior Met Coal (including 2 which are significant).
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
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.
アメリカの企業の約半数がP/E比率が17倍を超える中、Warrior Met Coal, Inc. (NYSE:HCC)の7倍のP/E比率は非常に魅力的な投資と考えられます。ただ、それが低い理由もあるかもしれず、正当化されるかどうかを判断するにはさらなる調査が必要です。
Warrior Met Coalは、その収益が他社よりも速く減少しているため、最近苦しんでいます。多くの人が見通しの悪い収益性が継続することを期待しているようで、そのためP/E比率が抑圧されています。企業がまだ好きな場合は、決定を下す前に収益の軌道変換を望んでいるか、少なくとも、株価が下がった場合に株式を購入するつもりである場合、収益性がさらに悪化しないことを願っていることでしょう。
Warrior Met Coalの最新の分析をご覧ください。
今後のアナリスト予測を確認するには、Warrior Met Coalに関する無料レポートをチェックする必要があります。
成長は低P/Eとマッチしていますか?
Warrior Met CoalのP/E比率は、非常に低い成長または減少する収益を提供することが予想され、重要です。また、市場よりもはるかに劣るパフォーマンスを発揮します。
Warrior Met Coalのアナリスト予測を調べたところ、その劣悪な収益見通しが低いP/Eに寄与していることがわかりました。現時点では、収益の改善の可能性が高くないため、投資家はより高いP/E比率を正当化するには十分ではないと感じています。今後しばらくの間、この状況が続くと、株価が急上昇することは難しいでしょう。
さらに、Warrior Met Coalについて注意すべき6つの警告サイン(2つは重要)についても学ぶ必要があります。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。