The Serial System Ltd (SGX:S69) 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 39% in that time.
Even after such a large drop in price, it's still not a stretch to say that Serial System's price-to-earnings (or "P/E") ratio of 8.7x right now seems quite "middle-of-the-road" compared to the market in Singapore, where the median P/E ratio is around 10x. While this might not raise any eyebrows, if the P/E ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
For instance, Serial System's receding earnings in recent times would have to be some food for thought. One possibility is that the P/E is moderate because investors think the company might still do enough to be in line with the broader market in the near future. If not, then existing shareholders may be a little nervous about the viability of the share price.
View our latest analysis for Serial System
SGX:S69 Price Based on Past Earnings October 19th 2022 Want the full picture on earnings, revenue and cash flow for the company? Then our
free report on Serial System will help you shine a light on its historical performance.
What Are Growth Metrics Telling Us About The P/E?
In order to justify its P/E ratio, Serial System would need to produce growth that's similar to the market.
Retrospectively, the last year delivered a frustrating 47% 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 65% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Comparing that to the market, which is predicted to deliver 3.8% growth in the next 12 months, the company's downward momentum based on recent medium-term earnings results is a sobering picture.
In light of this, it's somewhat alarming that Serial System's P/E sits in line with the majority of other companies. Apparently many investors in the company are way less bearish than recent times would indicate and aren't willing to let go of their stock right now. Only the boldest would assume these prices are sustainable as a continuation of recent earnings trends is likely to weigh on the share price eventually.
The Key Takeaway
With its share price falling into a hole, the P/E for Serial System looks quite average now. 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.
Our examination of Serial System revealed its shrinking earnings over the medium-term aren't impacting its P/E as much as we would have predicted, given the market is set to grow. Right now we are uncomfortable with the P/E as this earnings performance is unlikely to support a more positive sentiment for long. If recent medium-term earnings trends continue, it will place shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 6 warning signs with Serial System (at least 2 which don't sit too well with us), and understanding these should be part of your investment process.
If these risks are making you reconsider your opinion on Serial System, explore our interactive list of high quality stocks to get an idea of what else is out there.
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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.
Serial System Ltd(新加坡證券交易所股票代碼:S69)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39%。
即使在價格大幅下跌之後,可以毫不誇張地說,與新加坡市場相比,Serial System的8.7倍市盈率(或 “市盈率”)目前看來相當 “處於中間位置”,新加坡的市盈率中位數約爲10倍。儘管這可能不會引起任何關注,但如果市盈率不合理,投資者可能會錯過潛在的機會或無視迫在眉睫的失望。
例如,Serial System最近收益的下降值得深思。一種可能性是市盈率適中,因爲投資者認爲該公司在不久的將來可能做得足夠多,足以與大盤保持一致。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
查看我們對串行系統的最新分析
新加坡證券交易所:S69價格基於過去的2022年10月19日的收益想全面了解公司的收益、收入和現金流嗎?然後,我們關於串行系統的免費報告將幫助您了解其歷史表現。
關於市盈率,增長指標告訴我們什麼?
爲了證明其市盈率是合理的,Serial System需要實現與市場相似的增長。
回顧過去,去年的公司利潤下降了47%,令人沮喪。這意味着從長遠來看,其收益也有所下滑,因爲在過去三年中,每股收益總額下降了65%。因此,可以公平地說,最近的收益增長對公司來說是不可取的。
相比之下,市場預計將在未來12個月內實現3.8%的增長,根據最近的中期收益業績,該公司的下跌勢頭令人震驚。
有鑑於此,Serial System的市盈率與其他大多數公司持平,這有點令人震驚。顯然,該公司的許多投資者並不像最近所表明的那樣看跌,他們現在不願意放棄股票。只有最大膽的人才會假設這些價格是可持續的,因爲近期收益趨勢的延續最終可能會壓制股價。
關鍵要點
隨着其股價跌入低谷,串行系統的市盈率現在看起來相當一般。有人認爲,市盈率在某些行業中是衡量價值的次要指標,但它可能是一個有力的商業信心指標。
我們對Serial System的審查顯示,鑑於市場即將增長,其中期收益萎縮對市盈率的影響沒有我們預期的那麼大。目前,我們對市盈率感到不舒服,因爲這種收益表現不太可能長期支持更積極的情緒。如果最近的中期收益趨勢持續下去,將使股東的投資面臨風險,潛在投資者面臨支付不必要的溢價的危險。
始終有必要考慮永遠存在的投資風險幽靈。我們已經確定了Serial System的6個警告信號(至少有2個對我們來說不太合適),了解這些信號應該是您投資過程的一部分。
如果這些風險讓你重新考慮你對Serial System的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。
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Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。