The Market Lifts Aztech Global Ltd. (SGX:8AZ) Shares 26% But It Can Do More
The Market Lifts Aztech Global Ltd. (SGX:8AZ) Shares 26% But It Can Do More
Aztech Global Ltd. (SGX:8AZ) shares have had a really impressive month, gaining 26% after a shaky period beforehand. Looking back a bit further, it's encouraging to see the stock is up 30% in the last year.
Even after such a large jump in price, Aztech Global's price-to-earnings (or "P/E") ratio of 8x might still make it look like a buy right now compared to the market in Singapore, where around half of the companies have P/E ratios above 12x and even P/E's above 21x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/E.
Recent times have been pleasing for Aztech Global 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 not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Aztech Global.How Is Aztech Global's Growth Trending?
In order to justify its P/E ratio, Aztech Global would need to produce sluggish growth that's trailing the market.
If we review the last year of earnings growth, the company posted a terrific increase of 49%. Pleasingly, EPS has also lifted 44% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Shifting to the future, estimates from the four analysts covering the company suggest earnings should grow by 7.7% each year over the next three years. With the market predicted to deliver 6.5% growth per annum, the company is positioned for a comparable earnings result.
With this information, we find it odd that Aztech Global is trading at a P/E lower than the market. It may be that most investors are not convinced the company can achieve future growth expectations.
The Final Word
Despite Aztech Global's shares building up a head of steam, its P/E still lags most other companies. 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.
We've established that Aztech Global currently trades on a lower than expected P/E since its forecast growth is in line with the wider market. When we see an average earnings outlook with market-like growth, we assume potential risks are what might be placing pressure on the P/E ratio. At least the risk of a price drop looks to be subdued, but investors seem to think future earnings could see some volatility.
Plus, you should also learn about these 2 warning signs we've spotted with Aztech Global (including 1 which makes us a bit uncomfortable).
Of course, you might also be able to find a better stock than Aztech Global. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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.
Aztech Global Ltd.(新加坡證券交易所股票代碼:8AZ)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26%。再往前看,該股去年上漲了30%,令人鼓舞。
即使在價格大幅上漲之後,與新加坡市場相比,Aztech Global的8倍市盈率(或 “市盈率”)仍可能使其看起來像買入,新加坡約有一半的公司的市盈率超過12倍,甚至市盈率超過21倍也很常見。儘管如此,我們需要更深入地挖掘以確定降低市盈率是否有合理的基礎。
最近一段時間令Aztech Global感到高興,儘管市場收益反轉,但其收益卻有所增加。一種可能性是市盈率很低,因爲投資者認爲該公司的收益將像其他所有人一樣很快下降。如果不是,那麼現有股東就有理由對股價的未來走向非常樂觀。
如果你想了解分析師對未來的預測,你應該查看我們關於Aztech Global的免費報告。Aztech Global的增長趨勢如何?
爲了證明其市盈率是合理的,Aztech Global需要實現落後於市場的緩慢增長。
如果我們回顧一下去年的收益增長,該公司公佈了49%的驚人增長。令人高興的是,由於過去12個月的增長,每股收益總額也比三年前增長了44%。因此,可以公平地說,該公司最近的收益增長非常好。
展望未來,報道該公司的四位分析師的估計表明,未來三年收益每年將增長7.7%。預計市場每年將實現6.5%的增長,該公司有望實現可比的收益業績。
有了這些信息,我們覺得奇怪的是,Aztech Global的市盈率低於市場。可能是大多數投資者不相信公司能夠實現未來的增長預期。
最後一句話
儘管Aztech Global的股價蓬勃發展,但其市盈率仍然落後於大多數其他公司。我們可以說,市盈率的力量主要不在於作爲估值工具,而是衡量當前投資者情緒和未來預期。
我們已經確定,Aztech Global目前的市盈率低於預期,因爲其預測的增長與整個市場一致。當我們看到具有類似市場增長的平均收益前景時,我們假設潛在風險可能會給市盈率帶來壓力。至少價格下跌的風險似乎有所減弱,但投資者似乎認爲未來的收益可能會出現一些波動。
另外,你還應該了解我們在Aztech Global上發現的這兩個警告信號(其中一個讓我們有點不舒服)。
當然,你也可以找到比Aztech Global更好的股票。因此,你不妨免費查看其他市盈率合理且收益強勁增長的公司。
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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。
譯文內容由第三人軟體翻譯。
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