Pop Mart International Group Limited (HKG:9992) shares have had a really impressive month, gaining 25% after a shaky period beforehand. While recent buyers may be laughing, long-term holders might not be as pleased since the recent gain only brings the stock back to where it started a year ago.
Since its price has surged higher, Pop Mart International Group may be sending very bearish signals at the moment with a price-to-earnings (or "P/E") ratio of 43x, since almost half of all companies in Hong Kong have P/E ratios under 8x 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 so lofty.
Pop Mart International Group has been struggling lately as its earnings have declined faster than most other companies. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. If not, then existing shareholders may be very nervous about the viability of the share price.
SEHK:9992 Price to Earnings Ratio vs Industry March 4th 2024 Keen to find out how analysts think Pop Mart International Group'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, Pop Mart International Group would need to produce outstanding growth well in excess of the market.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 24%. Regardless, EPS has managed to lift by a handy 13% in aggregate from three years ago, thanks to the earlier period of growth. Although it's been a bumpy ride, it's still fair to say the earnings growth recently has been mostly respectable for the company.
Looking ahead now, EPS is anticipated to climb by 40% per year during the coming three years according to the analysts following the company. With the market only predicted to deliver 16% per annum, the company is positioned for a stronger earnings result.
In light of this, it's understandable that Pop Mart International Group'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 Pop Mart International Group's P/E?
Shares in Pop Mart International Group have built up some good momentum lately, which has really inflated its 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.
We've established that Pop Mart International Group maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
Many other vital risk factors can be found on the company's balance sheet. Our free balance sheet analysis for Pop Mart International Group with six simple checks will allow you to discover any risks that could be an issue.
If you're unsure about the strength of Pop Mart International Group's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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Pop Mart International Group Limited(HKG: 9992)的股價經歷了一個非常令人印象深刻的月份,在經歷了動盪時期之後上漲了25%。儘管最近的買家可能在笑,但長揸者可能不那麼高興,因爲最近的漲勢只會使該股恢復到一年前的起點。
由於其價格飆升,Pop Mart International Group目前可能會發出非常看跌的信號,市盈率(或 “市盈率”)爲43倍,因爲幾乎一半的香港公司的市盈率低於8倍,即使市盈率低於5倍也並不罕見。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如此之高。
Pop Mart International Group最近一直處於困境,因爲其收益下降速度快於大多數其他公司。一種可能性是市盈率居高不下,因爲投資者認爲該公司將徹底扭轉局面,加速超越市場上的大多數其他公司。如果不是,那麼現有股東可能會對股價的可行性感到非常擔憂。
SEHK: 9992 對比行業的市盈率 2024 年 3 月 4 日 想了解分析師如何看待Pop Mart International Group的未來與該行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。
關於高市盈率,增長指標告訴我們什麼?
爲了證明其市盈率是合理的,Pop Mart International Group需要實現遠遠超過市場的出色增長。