When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 16x, you may consider Portillo's Inc. (NASDAQ:PTLO) as a stock to avoid entirely with its 40.2x P/E ratio. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.
With its earnings growth in positive territory compared to the declining earnings of most other companies, Portillo's has been doing quite well of late. 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. If not, then existing shareholders might be a little nervous about the viability of the share price.
NasdaqGS:PTLO Price to Earnings Ratio vs Industry April 28th 2024
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Portillo's.
Does Growth Match The High P/E?
Portillo's' P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the market.
If we review the last year of earnings growth, the company posted a terrific increase of 24%. Although, its longer-term performance hasn't been as strong with three-year EPS growth being relatively non-existent overall. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.
Shifting to the future, estimates from the eleven analysts covering the company suggest earnings should grow by 31% each year over the next three years. With the market only predicted to deliver 11% each year, the company is positioned for a stronger earnings result.
With this information, we can see why Portillo's is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
The Key Takeaway
Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
We've established that Portillo's 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. Unless these conditions change, they will continue to provide strong support to the share price.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Portillo's that you need to be mindful of.
Of course, you might also be able to find a better stock than Portillo's. 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.
當將近一半的美國公司的市盈率(或 “市盈率”)低於16倍時,你可以將波蒂略公司(納斯達克股票代碼:PTLO)視爲股票,以其40.2倍的市盈率完全避免。但是,市盈率可能相當高是有原因的,需要進一步調查以確定其是否合理。
與大多數其他公司的收益下降相比,波蒂略的收益增長處於正值區間,最近表現良好。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。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
納斯達克GS:PTLO對比行業的市盈率 2024年4月28日
如果你想了解分析師對未來的預測,你應該查看我們關於波蒂略的免費報告。
增長與高市盈率相匹配嗎?
波蒂略的市盈率對於一家預計將實現非常強勁的增長,而且重要的是,其表現要好於市場的公司來說是典型的。
如果我們回顧一下去年的收益增長,該公司公佈了24%的驚人增長。但是,其長期表現並不那麼強勁,三年每股收益總體增長相對不存在。因此,股東們可能不會對不穩定的中期增長率感到過於滿意。
展望未來,報道該公司的11位分析師的估計表明,未來三年收益每年將增長31%。由於預計市場每年僅增長11%,該公司有望實現更強勁的盈利業績。
有了這些信息,我們可以明白爲什麼波蒂略的市盈率與市場相比如此之高。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。
關鍵要點
通常,我們傾向於將市盈率的使用限制在確定市場對公司整體健康狀況的看法上。
我們已經確定,波蒂略之所以保持高市盈率,是因爲其預測的增長將高於整個市場,正如預期的那樣。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。除非這些條件發生變化,否則它們將繼續爲股價提供強有力的支撐。
我們不想在遊行隊伍中下太多雨,但我們也確實找到了波蒂略的一個警告標誌,你需要注意。
當然,你也可以找到比波蒂略更好的股票。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。
對這篇文章有反饋嗎?對內容感到擔憂嗎?請直接聯繫我們。或者,也可以發送電子郵件至編輯團隊 (at) simplywallst.com。
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。