Oppein Home Group Inc.'s (SHSE:603833) price-to-earnings (or "P/E") ratio of 14.1x might make it look like a strong buy right now compared to the market in China, where around half of the companies have P/E ratios above 31x and even P/E's above 57x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
Recent times have been pleasing for Oppein Home Group as its earnings have risen in spite of the market's earnings going into reverse. One possibility is that the P/E is low because investors think the company's earnings are going to fall away like everyone else's soon. 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 out of favour.
SHSE:603833 Price to Earnings Ratio vs Industry February 28th 2024 Want the full picture on analyst estimates for the company? Then our free report on Oppein Home Group will help you uncover what's on the horizon.
How Is Oppein Home Group's Growth Trending?
In order to justify its P/E ratio, Oppein Home Group would need to produce anemic growth that's substantially trailing the market.
Retrospectively, the last year delivered an exceptional 18% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 53% 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.
Looking ahead now, EPS is anticipated to climb by 12% during the coming year according to the analysts following the company. Meanwhile, the rest of the market is forecast to expand by 41%, which is noticeably more attractive.
In light of this, it's understandable that Oppein Home Group's P/E sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Final Word
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 Oppein Home Group's analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. It's hard to see the share price rising strongly in the near future under these circumstances.
And what about other risks? Every company has them, and we've spotted 1 warning sign for Oppein Home Group you should know about.
If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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Oppein Home Group Inc. 's(SHSE: 603833)市盈率(或 “市盈率”)为14.1倍,与中国市场相比,目前看上去像是一个强劲的买盘,中国约有一半的公司的市盈率超过31倍,甚至市盈率高于57倍也很常见。尽管如此,我们需要更深入地挖掘,以确定市盈率大幅下降是否有合理的基础。
最近一段时间令Oppein Home Group感到高兴,因为尽管市场收益出现逆转,但其收益却有所增加。一种可能性是市盈率很低,因为投资者认为该公司的收益将像其他所有人一样很快下降。如果你喜欢这家公司,你希望情况并非如此,这样你就有可能在它失宠的时候买入一些股票。