Jiangsu Xinri E-Vehicle Co., Ltd.'s (SHSE:603787) Share Price Boosted 31% But Its Business Prospects Need A Lift Too
Jiangsu Xinri E-Vehicle Co., Ltd.'s (SHSE:603787) Share Price Boosted 31% But Its Business Prospects Need A Lift Too
Jiangsu Xinri E-Vehicle Co., Ltd. (SHSE:603787) shareholders are no doubt pleased to see that the share price has bounced 31% in the last month, although it is still struggling to make up recently lost ground. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 41% in the last twelve months.
Although its price has surged higher, Jiangsu Xinri E-Vehicle may still be sending bullish signals at the moment with its price-to-earnings (or "P/E") ratio of 21.8x, since almost half of all companies in China have P/E ratios greater than 32x and even P/E's higher than 58x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/E.
As an illustration, earnings have deteriorated at Jiangsu Xinri E-Vehicle over the last year, which is not ideal at all. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. 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.
Although there are no analyst estimates available for Jiangsu Xinri E-Vehicle, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.How Is Jiangsu Xinri E-Vehicle's Growth Trending?
Jiangsu Xinri E-Vehicle's P/E ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 22%. The last three years don't look nice either as the company has shrunk EPS by 5.4% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
In contrast to the company, the rest of the market is expected to grow by 41% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
In light of this, it's understandable that Jiangsu Xinri E-Vehicle's P/E would sit below the majority of other companies. However, we think shrinking earnings are unlikely to lead to a stable P/E over the longer term, which could set up shareholders for future disappointment. Even just maintaining these prices could be difficult to achieve as recent earnings trends are already weighing down the shares.
The Bottom Line On Jiangsu Xinri E-Vehicle's P/E
Despite Jiangsu Xinri E-Vehicle's shares building up a head of steam, its P/E still lags most other companies. 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.
As we suspected, our examination of Jiangsu Xinri E-Vehicle revealed its shrinking earnings over the medium-term are contributing to its low P/E, given the market is set to grow. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. If recent medium-term earnings trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.
Don't forget that there may be other risks. For instance, we've identified 3 warning signs for Jiangsu Xinri E-Vehicle (1 shouldn't be ignored) you should be aware of.
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.
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.
江蘇新日電動汽車有限公司(SHSE: 603787)股東無疑高興地看到,股價在上個月反彈了31%,儘管它仍在努力彌補最近的跌勢。並非所有股東都會感到歡欣鼓舞,因爲股價在過去十二個月中仍然下跌了令人失望的41%。
儘管價格飆升,但江蘇新日電動汽車目前可能仍在發出看漲信號,其市盈率(或 “市盈率”)爲21.8倍,因爲幾乎一半的中國公司的市盈率超過32倍,甚至市盈率高於58倍也並不罕見。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。
舉例來說,去年,江蘇新日電動汽車的收益有所惡化,這根本不理想。許多人可能預計,令人失望的盈利表現將持續或加速,這抑制了市盈率。如果你喜歡該公司,你會希望情況並非如此,這樣你就有可能在股票失寵的時候買入一些股票。
儘管沒有分析師對江蘇新日電動汽車的估計,但看看這個免費的數據豐富的可視化工具,看看該公司在收益、收入和現金流方面的積累情況。江蘇新日電動汽車的增長趨勢如何?
江蘇新日電動汽車的市盈率對於一家預計增長有限,而且重要的是表現不如市場表現的公司來說是典型的。
如果我們回顧一下去年的收益,令人沮喪的是,該公司的利潤下降了22%。過去三年看起來也不太好,因爲該公司的每股收益總共縮水了5.4%。因此,股東會對中期收益增長率感到悲觀。
與該公司形成鮮明對比的是,預計明年其他市場將增長41%,這確實反映了該公司最近的中期收益下降情況。
有鑑於此,江蘇新日電動汽車的市盈率將低於其他大多數公司是可以理解的。但是,我們認爲,從長遠來看,收益萎縮不太可能帶來穩定的市盈率,這可能會使股東對未來的失望情緒感到失望。即使僅僅維持這些價格也可能難以實現,因爲最近的收益趨勢已經壓低了股價。
江蘇新日電動汽車市盈率的底線
儘管江蘇新日電動汽車的股價蓬勃發展,但其市盈率仍然落後於大多數其他公司。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。
正如我們所懷疑的那樣,我們對江蘇新日電動汽車的檢查顯示,鑑於市場即將增長,其中期收益萎縮是其市盈率低的原因。目前,股東們正在接受低市盈率,因爲他們承認未來的收益可能不會帶來任何驚喜。如果最近的中期收益趨勢繼續下去,在這種情況下,很難看到股價在不久的將來雙向強勁走勢。
別忘了可能還有其他風險。例如,我們已經確定了您應該注意的江蘇新日電動汽車的3個警告標誌(其中1個不容忽視)。
如果你對市盈率感興趣,你可能希望看到這批盈利增長強勁、市盈率低的免費公司。
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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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