With a median price-to-earnings (or "P/E") ratio of close to 17x in the United States, you could be forgiven for feeling indifferent about Option Care Health, Inc.'s (NASDAQ:OPCH) P/E ratio of 17.8x. Although, it's not wise to simply ignore the P/E without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
Option Care Health certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It might be that many expect the strong earnings performance to deteriorate like the rest, which has kept the P/E from rising. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.
NasdaqGS:OPCH Price to Earnings Ratio vs Industry June 17th 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on Option Care Health.
What Are Growth Metrics Telling Us About The P/E?
Option Care Health's P/E ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the market.
If we review the last year of earnings growth, the company posted a terrific increase of 75%. The strong recent performance means it was also able to grow EPS by 3,078% in total over the last three years. So we can start by confirming that the company has done a great job of growing earnings over that time.
Shifting to the future, estimates from the eight analysts covering the company suggest earnings growth is heading into negative territory, declining 1.7% each year over the next three years. That's not great when the rest of the market is expected to grow by 9.9% each year.
In light of this, it's somewhat alarming that Option Care Health's P/E sits in line with the majority of other companies. Apparently many investors in the company reject the analyst cohort's pessimism and aren't willing to let go of their stock right now. Only the boldest would assume these prices are sustainable as these declining earnings are likely to weigh on the share price eventually.
What We Can Learn From Option Care Health's 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.
Our examination of Option Care Health's analyst forecasts revealed that its outlook for shrinking earnings isn't impacting its P/E as much as we would have predicted. When we see a poor outlook with earnings heading backwards, we suspect share price is at risk of declining, sending the moderate P/E lower. Unless these conditions improve, it's challenging to accept these prices as being reasonable.
There are also other vital risk factors to consider and we've discovered 3 warning signs for Option Care Health (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
You might be able to find a better investment than Option Care Health. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
米国においてP/E比率が約17倍である状況下、Option Care Health社(NASDAQ:OPCH)のP/E比率が17.8xであることに関して無関心な気持ちになっても許されます。ただ、投資家が明確な機会や高額のミスを無視するのは賢明でないため、P/E比率を説明なしに単純に無視することはあり得ません。
Option Care Healthは、多くの他社が収益を減少させている中で、収益成長がプラスになったことから、ここ最近、良い仕事をしていると言えます。市場に代わる強力な収益成長が後退することが予想されるため、P/Eが上昇していないのかもしれません。この会社に投資する場合、人気が出る前に株式を入手できるかもしれないことを望んでいることでしょう。
ナスダック:OPCH 株価収益率 対業種 2024年6月17日今後のアナリスト予想を確認したい場合は、Option Care Healthの無料レポートをご覧ください。
成長指標がP/Eについて何を言っているか?
Option Care HealthのP/E比率は、市場と同じようにパフォーマンスがまあまあで、成長が穏やかであると予想される会社によくあるタイプのものです。
このことを考慮すると、Option Care HealthのP/E比率が他の多くの企業と同じであることは、やや懸念すべきことです。明らかに、多くの投資家がアナリストコホートの悲観主義を拒否し、今すぐ株式を手放すことはできないと考えているようです。これらの減少する収益が、いつか株価に重荷をかけることが予想されるため、これらの価格が持続可能であると仮定するのは、最も勇敢な人たちだけです。
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。