The Cubic Sensor and Instrument Co., Ltd (SHSE:688665) share price has fared very poorly over the last month, falling by a substantial 26%. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 44% in that time.
In spite of the heavy fall in price, Cubic Sensor and Instrument's price-to-earnings (or "P/E") ratio of 26.2x might still make it look like a buy right now compared to the market in China, where around half of the companies have P/E ratios above 32x and even P/E's above 57x are quite common. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited.
Recent times haven't been advantageous for Cubic Sensor and Instrument as its earnings have been falling quicker than most other companies. The P/E is probably low because investors think this poor earnings performance isn't going to improve at all. You'd much rather the company wasn't bleeding earnings if you still believe in the business. If not, then existing shareholders will probably struggle to get excited about the future direction of the share price.
Check out our latest analysis for Cubic Sensor and Instrument
SHSE:688665 Price to Earnings Ratio vs Industry January 29th 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on Cubic Sensor and Instrument.
Is There Any Growth For Cubic Sensor and Instrument?
The only time you'd be truly comfortable seeing a P/E as low as Cubic Sensor and Instrument's is when the company's growth is on track to lag the market.
Retrospectively, the last year delivered a frustrating 6.3% 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 45% in total over the last three years. So we can start by confirming that the company has generally done a very good job of growing earnings over that time, even though it had some hiccups along the way.
Looking ahead now, EPS is anticipated to climb by 76% during the coming year according to the five analysts following the company. With the market only predicted to deliver 42%, the company is positioned for a stronger earnings result.
In light of this, it's peculiar that Cubic Sensor and Instrument's P/E sits below the majority of other companies. It looks like most investors are not convinced at all that the company can achieve future growth expectations.
The Final Word
Cubic Sensor and Instrument's P/E has taken a tumble along with its share price. We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
Our examination of Cubic Sensor and Instrument's analyst forecasts revealed that its superior earnings outlook isn't contributing to its P/E anywhere near as much as we would have predicted. There could be some major unobserved threats to earnings preventing the P/E ratio from matching the positive outlook. It appears many are indeed anticipating earnings instability, because these conditions should normally provide a boost to the share price.
Before you settle on your opinion, we've discovered 2 warning signs for Cubic Sensor and Instrument (1 is significant!) that you should be aware of.
It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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Cubic Sensor and Instrument有限公司(上海證券交易所股票代碼:688665)的股價在上個月表現非常糟糕,大幅下跌了26%。過去30天的下跌結束了股東艱難的一年,當時股價下跌了44%。
儘管價格大幅下跌,但Cubic Sensor and Instrument的26.2倍市盈率(或 “市盈率”)與中國市場相比,目前仍可能看起來像買入,中國約有一半公司的市盈率超過32倍,甚至市盈率超過57倍也很常見。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率有限。
最近對Cubic Sensor and Instrument來說並不是有利的,因爲其收益的下降速度比大多數其他公司快。市盈率可能很低,因爲投資者認爲這種糟糕的收益表現根本不會改善。如果你仍然相信公司的業務,你寧願公司不流失收益。如果不是,那麼現有股東可能很難對股價的未來走向感到興奮。