With a price-to-earnings (or "P/E") ratio of 12.7x FIT Hon Teng Limited (HKG:6088) may be sending bearish signals at the moment, given that almost half of all companies in Hong Kong have P/E ratios under 9x and even P/E's lower than 5x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's as high as it is.
Recent times haven't been advantageous for FIT Hon Teng as its earnings have been falling quicker than most other companies. It might be that many expect the dismal earnings performance to recover substantially, which has kept the P/E from collapsing. If not, then existing shareholders may be very nervous about the viability of the share price.
View our latest analysis for FIT Hon Teng
SEHK:6088 Price to Earnings Ratio vs Industry January 8th 2024 Keen to find out how analysts think FIT Hon Teng's future stacks up against the industry? In that case, our free report is a great place to start.
What Are Growth Metrics Telling Us About The High P/E?
In order to justify its P/E ratio, FIT Hon Teng would need to produce impressive growth in excess of the market.
Retrospectively, the last year delivered a frustrating 66% decrease to the company's bottom line. This means it has also seen a slide in earnings over the longer-term as EPS is down 55% in total over the last three years. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
Shifting to the future, estimates from the four analysts covering the company suggest earnings should grow by 42% per year over the next three years. With the market only predicted to deliver 15% per annum, the company is positioned for a stronger earnings result.
In light of this, it's understandable that FIT Hon Teng's P/E sits above the majority of other companies. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From FIT Hon Teng's P/E?
While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
We've established that FIT Hon Teng 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. It's hard to see the share price falling strongly in the near future under these circumstances.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with FIT Hon Teng, and understanding should be part of your investment process.
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.
FIT Hon Teng株式会社(HKG: 6088)の株価収益(P / E)比率が12.7倍であるため、香港のほとんどの企業のP / E比率が9倍未満であり、さらに5倍未満のP / E比率は珍しくないため、現在弱気シグナルを送信している可能性があります。ただし、P / Eを単に顔の値で受け取るのは賢明ではありません。高い理由がある場合があるためです。
最近、FIT Hon Tengは、多くの他の企業よりも収益が急速に減少しているため、有利な状況ではありませんでした。散々な収益の業績が大幅に回復することを多くの人が期待していることが、P / Eが崩壊しない理由かもしれません。もしそうでなければ、既存の株主はシェア価格の持続可能性に非常に不安を抱くかもしれません。
FIT Hon Tengの最新の分析を見る
SEHK:6088株価収益率 vs 業種 January 8th 2024アナリストはFIT Hon Tengの将来が業界とどう比較するかを知りたがっていますか?その場合、当社の無料レポートは最適な出発点です。
成長指標が高いP / Eについて何を示しているのか?
市場を超える印象的な成長を生み出すために、FIT Hon TengはそのP / E比率を正当化する必要があります。
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。