To the annoyance of some shareholders, UCAP Cloud Information Technology Co.,Ltd. (SHSE:688228) shares are down a considerable 25% in the last month, which continues a horrid run for the company. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 27% in that time.
Although its price has dipped substantially, UCAP Cloud Information TechnologyLtd's price-to-earnings (or "P/E") ratio of 63.7x might still make it look like a strong sell right now compared to the market in China, where around half of the companies have P/E ratios below 30x and even P/E's below 19x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
For instance, UCAP Cloud Information TechnologyLtd's receding earnings in recent times would have to be some food for thought. It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/E from collapsing. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on UCAP Cloud Information TechnologyLtd will help you shine a light on its historical performance.
How Is UCAP Cloud Information TechnologyLtd's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as steep as UCAP Cloud Information TechnologyLtd's is when the company's growth is on track to outshine the market decidedly.
Retrospectively, the last year delivered a frustrating 56% decrease to the company's bottom line. As a result, earnings from three years ago have also fallen 41% overall. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
In contrast to the company, the rest of the market is expected to grow by 36% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
In light of this, it's alarming that UCAP Cloud Information TechnologyLtd's P/E sits above the majority of other companies. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. There's a very good chance existing shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the recent negative growth rates.
What We Can Learn From UCAP Cloud Information TechnologyLtd's P/E?
Even after such a strong price drop, UCAP Cloud Information TechnologyLtd's P/E still exceeds the rest of the market significantly. 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 UCAP Cloud Information TechnologyLtd currently trades on a much higher than expected P/E since its recent earnings have been in decline over the medium-term. Right now we are increasingly uncomfortable with the high P/E as this earnings performance is highly unlikely to support such positive sentiment for long. If recent medium-term earnings trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Before you settle on your opinion, we've discovered 3 warning signs for UCAP Cloud Information TechnologyLtd (1 is significant!) that you should be aware of.
You might be able to find a better investment than UCAP Cloud Information TechnologyLtd. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
儘管其價格已大幅下跌,但與中國市場相比,UCAP Cloud Information TechnologyLtd的63.7倍市盈率(或 “市盈率”)仍可能使其看起來像是強勁的拋售,中國約有一半的公司的市盈率低於30倍,甚至市盈率低於19倍也很常見。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅上漲是否有合理的基礎。
例如,UCAP Cloud Information TechnologyLtd最近收益的下降值得深思。許多人可能預計,在未來一段時間內,該公司的表現仍將超過大多數其他公司,這阻止了市盈率的暴跌。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想全面了解公司的收益、收入和現金流嗎?那麼我們關於UCAP Cloud Information TechnologyLtd的免費報告將幫助您了解其歷史表現。
UCAP 雲信息技術有限公司的增長趨勢如何?
你唯一能真正放心地看到像UCAP Cloud Information TechnologyLtd一樣高的市盈率時,是該公司的增長有望明顯超過市場的時候。
有鑑於此,令人震驚的是,UCAP Cloud Information TechnologyLtd的市盈率高於大多數其他公司。顯然,該公司的許多投資者比最近所表示的要看漲得多,他們不願意以任何價格拋售股票。如果市盈率降至更符合近期負增長率的水平,現有股東很有可能爲未來的失望做好準備。
我們可以從UCAP Cloud 信息技術有限公司的市盈率中學到什麼?
即使在價格下跌如此強勁之後,UCAP Cloud Information TechnologyLtd的市盈率仍大大超過其他市場。儘管市盈率不應該成爲決定你是否買入股票的決定性因素,但它是衡量收益預期的有力晴雨表。
我們已經確定,UCAP Cloud Information TechnologyLtd目前的市盈率遠高於預期,因爲其最近的收益在中期內有所下降。目前,我們對高市盈率越來越不滿意,因爲這種收益表現極不可能長期支撐這種積極情緒。如果最近的中期收益趨勢繼續下去,這將使股東的投資面臨重大風險,潛在投資者面臨支付過高溢價的危險。
在你確定自己的意見之前,我們已經發現了 UCAP Cloud Information TechnologyLtd 的 3 個警告信號(1 個很重要!)你應該注意的。
你也許能找到比UCAP Cloud Information TechnologyLtd更好的投資。如果你想選擇可能的候選人,可以免費查看這份有趣的公司名單,這些公司的市盈率很低(但已經證明可以增加收益)。