What You Can Learn From IES Holdings, Inc.'s (NASDAQ:IESC) P/E
What You Can Learn From IES Holdings, Inc.'s (NASDAQ:IESC) P/E
IES Holdings, Inc.'s (NASDAQ:IESC) price-to-earnings (or "P/E") ratio of 23.2x might make it look like a sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 16x and even P/E's below 9x are quite common. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's as high as it is.
With earnings growth that's exceedingly strong of late, IES Holdings has been doing very well. It seems that many are expecting the strong earnings performance to beat most other companies over the coming period, which has increased investors' willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on IES Holdings' earnings, revenue and cash flow.Is There Enough Growth For IES Holdings?
There's an inherent assumption that a company should outperform the market for P/E ratios like IES Holdings' to be considered reasonable.
If we review the last year of earnings growth, the company posted a terrific increase of 180%. The latest three year period has also seen an excellent 147% overall rise in EPS, aided by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time.
This is in contrast to the rest of the market, which is expected to grow by 11% over the next year, materially lower than the company's recent medium-term annualised growth rates.
In light of this, it's understandable that IES Holdings' P/E sits above the majority of other companies. Presumably shareholders aren't keen to offload something they believe will continue to outmanoeuvre the bourse.
The Key Takeaway
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.
We've established that IES Holdings maintains its high P/E on the strength of its recent three-year growth being higher than the wider market forecast, as expected. Right now shareholders are comfortable with the P/E as they are quite confident earnings aren't under threat. If recent medium-term earnings trends continue, it's hard to see the share price falling strongly in the near future under these circumstances.
You always need to take note of risks, for example - IES Holdings has 1 warning sign we think you should be aware of.
You might be able to find a better investment than IES Holdings. 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.
IES Holdings, Inc. 's(納斯達克股票代碼:IESC)市盈率(或 “市盈率”)爲23.2倍,與美國市場相比,目前可能看起來像賣出。在美國,約有一半公司的市盈率低於16倍,甚至市盈率低於9倍也很常見。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。
由於最近收益增長異常強勁,IES Holdings一直表現良好。看來許多人預計,強勁的收益表現將在未來一段時間內擊敗大多數其他公司,這增加了投資者購買股票的意願。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
我們沒有分析師的預測,但您可以查看我們關於IES Holdings收益、收入和現金流的免費報告,了解最近的趨勢如何爲公司未來做好準備。IES Holdings有足夠的增長嗎?
人們固有的假設是,如果像IES Holdings這樣的市盈率被認爲是合理的,公司的表現應該優於市場。
如果我們回顧一下去年的收益增長,該公司公佈了180%的驚人增長。在短期表現的推動下,最近三年期間,每股收益總體增長了147%。因此,我們可以首先確認該公司在這段時間內在增加收益方面做得很好。
這與其他市場形成鮮明對比,預計明年市場將增長11%,大大低於該公司最近的中期年化增長率。
有鑑於此,IES Holdings的市盈率高於其他大多數公司是可以理解的。據推測,股東們並不熱衷於轉移他們認爲將繼續超越證券交易所的資金。
關鍵要點
有人認爲,市盈率是衡量某些行業價值的次要指標,但它可能是一個有力的商業情緒指標。
我們已經確定,IES Holdings維持了較高的市盈率,原因是其最近三年的增長如預期的那樣高於整個市場預測。目前,股東對市盈率感到滿意,因爲他們非常有信心收益不會受到威脅。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會強勁下跌。
例如,你需要時刻注意風險,IES Holdings有1個我們認爲你應該注意的警告信號。
你也許能找到比IES Holdings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)。
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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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