Climb Global Solutions, Inc. (NASDAQ:CLMB) shares have continued their recent momentum with a 33% gain in the last month alone. The last month tops off a massive increase of 114% in the last year.
Since its price has surged higher, given close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 17x, you may consider Climb Global Solutions as a stock to avoid entirely with its 27.9x P/E ratio. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.
Climb Global Solutions 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 seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.
Keen to find out how analysts think Climb Global Solutions' future stacks up against the industry? In that case, our free report is a great place to start.
Is There Enough Growth For Climb Global Solutions?
In order to justify its P/E ratio, Climb Global Solutions would need to produce outstanding growth well in excess of the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 16% last year. Pleasingly, EPS has also lifted 107% in aggregate from three years ago, thanks to the last 12 months of growth. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth.
Looking ahead now, EPS is anticipated to climb by 11% during the coming year according to the only analyst following the company. Meanwhile, the rest of the market is forecast to expand by 15%, which is noticeably more attractive.
With this information, we find it concerning that Climb Global Solutions is trading at a P/E higher than the market. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.
What We Can Learn From Climb Global Solutions' P/E?
The strong share price surge has got Climb Global Solutions' P/E rushing to great heights as well. Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that Climb Global Solutions currently trades on a much higher than expected P/E since its forecast growth is lower than the wider market. When we see a weak earnings outlook with slower than market growth, we suspect the share price is at risk of declining, sending the high P/E lower. Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.
A lot of potential risks can sit within a company's balance sheet. Our free balance sheet analysis for Climb Global Solutions with six simple checks will allow you to discover any risks that could be an issue.
Of course, you might also be able to find a better stock than Climb Global Solutions. 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.
Climb Global Solutions、Inc.(NASDAQ:CLMB)株は最近の勢いを維持し、直近1ヶ月で33%増加しました。最近の1年間の急激な増加率は114%に達しています。
価格が上昇したため、米国の半数近くの企業のP/ E比率も17倍以下であることを考えると、27.9倍のP/ E比率を持つClimb Global Solutionsは完全に避けるべき株式です。ただし、P / E比率がかなり高いため、正当化されるかどうかを判断するためにはさらなる調査が必要です。
Climb Global Solutionsは、他の多くの企業が収益を下げる中、収益成長がプラスになっているため、最近は良い仕事をしています。多くの人々が、企業が広範な市場の逆境に反することを続けると予想しており、それにより株式を高値で買う意欲が高まっています。そうでない場合、既存の株主が株価の持続可能性について少し神経質になるかもしれません。
Climb Global Solutionsの将来が業界と比較してどのように見えるかをアナリストがどのように考えているかを知りたいと思っていますか?その場合、私たちの無料レポートがお勧めです。
Climb Global Solutionsには十分な成長がありますか?
P / E比率を正当化するためには、Climb Global Solutionsは市場を大きく上回る優れた成長を生み出す必要があります。
この情報を踏まえると、Climb Global Solutionsが市場よりも高いP / Eで取引されていることには懸念があると考えます。多くの投資家が企業のビジネス見通しの回復を期待しているようですが、アナリストの集団はそれほど自信を持っていないようです。株式の成長見通しに合わせてP / Eが低下する場合、これらの株主が将来的な失望感を抱く可能性が高いため、これらの価格を合理的だと受け入れることは非常に困難です。
Climb Global SolutionsのP / Eから学べることは何ですか?
強力な株価の上昇は、Climb Global SolutionsのP / Eを高い高さに急速に押し上げました。通常、投資判断を決定する際には、株価収益率にあまり深く読み込むことは警告しますが、他の市場参加者が会社についてどのように考えているかを多くに明らかにすることができます。
予想される成長率が市場よりも低いため、Climb Global Solutionsは現在、予想を上回るP / Eで取引されています。収益見通しの弱さと市場成長よりも遅いペースであることを見ると、株価は低下するリスクに直面していると考えられます。これらの状況が著しく改善しない限り、これらの価格が合理的であると受け入れることは非常に困難です。
企業のバランスシートには、潜在的なリスクが多数存在する可能性があります。当社の無料バランスシート分析では、6つの簡単なチェックでClimb Global Solutionsのリスクを確認できます。
もちろん、Climb Global Solutionsよりも妥当なP / E比率を持ち、収益が強力に増加した他の企業の無料コレクションを見つけることもできるかもしれません。
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。