When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 16x, you may consider Axalta Coating Systems Ltd. (NYSE:AXTA) as a stock to avoid entirely with its 26.2x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
Axalta Coating Systems certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
NYSE:AXTA Price to Earnings Ratio vs Industry April 18th 2024
Keen to find out how analysts think Axalta Coating Systems' future stacks up against the industry? In that case, our free report is a great place to start.
Does Growth Match The High P/E?
There's an inherent assumption that a company should far outperform the market for P/E ratios like Axalta Coating Systems' to be considered reasonable.
Retrospectively, the last year delivered an exceptional 40% gain to the company's bottom line. The latest three year period has also seen an excellent 135% 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.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 20% each year over the next three years. Meanwhile, the rest of the market is forecast to only expand by 10% per year, which is noticeably less attractive.
In light of this, it's understandable that Axalta Coating Systems' P/E sits above the majority of other companies. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From Axalta Coating Systems' P/E?
Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that Axalta Coating Systems maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Axalta Coating Systems that you need to be mindful of.
Of course, you might also be able to find a better stock than Axalta Coating Systems. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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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.
當美國近半數公司的市盈率(或"P/E's")低於16倍時,你可以考慮完全迴避Axalta Coating Systems Ltd(紐約證券交易所股票代碼:AXTA)這隻市盈率爲26.2倍的股票。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。
Axalta Coating Systems最近無疑做得很好,因爲其收益增長是正的,而大多數其他公司的收益卻在倒退。看來許多人預計該公司將繼續克服更廣泛的市場逆境,這增加了投資者購買股票的意願。你真的希望如此,否則你會無緣無故地付出相當大的代價。
紐約證券交易所:AXTA 對比行業的市盈率 2024 年 4 月 18 日
想了解分析師如何看待Axalta Coating Systems的未來與行業對立嗎?在這種情況下,我們的免費報告是一個很好的起點。
增長與高市盈率相匹配嗎?
人們固有的假設是,如果像Axalta Coating Systems這樣的市盈率被認爲是合理的,公司的表現應該遠遠超過市場。
回顧過去,去年的公司利潤實現了40%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135%。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。
展望未來,報道該公司的分析師的估計表明,未來三年收益將每年增長20%。同時,預計其他市場每年僅增長10%,吸引力明顯降低。
有鑑於此,Axalta Coating Systems的市盈率高於其他大多數公司是可以理解的。看來大多數投資者都在期待這種強勁的未來增長,並願意爲該股支付更多費用。
我們可以從Axalta Coating Systems的市盈率中學到什麼?
通常,在做出投資決策時,我們會謹慎行事,不要過多地閱讀市盈率,儘管這可以充分揭示其他市場參與者對公司的看法。
我們已經確定,Axalta Coating Systems保持了較高的市盈率,原因是其預期的增長將高於整個市場。在現階段,投資者認爲,收益惡化的可能性不足以證明降低市盈率是合理的。在這種情況下,很難看到股價在不久的將來會強勁下跌。
我們不想在遊行隊伍中下太多雨,但我們也找到了Axalta Coating Systems的一個警告標誌,你需要注意。
當然,你也可以找到比Axalta Coating Systems更好的庫存。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。