Some Confidence Is Lacking In CPS Technologies Corporation (NASDAQ:CPSH) As Shares Slide 27%
Some Confidence Is Lacking In CPS Technologies Corporation (NASDAQ:CPSH) As Shares Slide 27%
The CPS Technologies Corporation (NASDAQ:CPSH) share price has fared very poorly over the last month, falling by a substantial 27%. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 35% in that time.
In spite of the heavy fall in price, given around half the companies in the United States have price-to-earnings ratios (or "P/E's") below 16x, you may still consider CPS Technologies as a stock to potentially avoid with its 19.1x P/E ratio. However, the P/E might be high for a reason and it requires further investigation to determine if it's justified.
As an illustration, earnings have deteriorated at CPS Technologies over the last year, which is not ideal at all. One possibility is that the P/E is high because investors think the company will still do enough to outperform the broader market in the near future. If not, then existing shareholders may be quite 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 CPS Technologies' earnings, revenue and cash flow.Is There Enough Growth For CPS Technologies?
In order to justify its P/E ratio, CPS Technologies would need to produce impressive growth in excess of the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 37%. However, a few very strong years before that means that it was still able to grow EPS by an impressive 38% in total over the last three years. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 11% shows it's about the same on an annualised basis.
With this information, we find it interesting that CPS Technologies is trading at a high P/E compared to the market. Apparently many investors in the company are more bullish than recent times would indicate and aren't willing to let go of their stock right now. Although, additional gains will be difficult to achieve as a continuation of recent earnings trends would weigh down the share price eventually.
The Bottom Line On CPS Technologies' P/E
Despite the recent share price weakness, CPS Technologies' P/E remains higher than most other companies. 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.
Our examination of CPS Technologies revealed its three-year earnings trends aren't impacting its high P/E as much as we would have predicted, given they look similar to current market expectations. Right now we are uncomfortable with the high P/E as this earnings performance isn't likely to support such positive sentiment for long. If recent medium-term earnings trends continue, it will place shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
It is also worth noting that we have found 2 warning signs for CPS Technologies that you need to take into consideration.
If these risks are making you reconsider your opinion on CPS Technologies, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
CPS Technologies公司(納斯達克股票代碼:CPSH)的股價在上個月表現非常糟糕,大幅下跌了27%。過去30天的下跌結束了股東艱難的一年,當時股價下跌了35%。
儘管股價大幅下跌,但鑑於美國約有一半的公司的市盈率(或 “市盈率”)低於16倍,您仍然可以將CPS Technologies視爲市盈率爲19.1倍的股票,可能需要避免。但是,市盈率之高可能是有原因的,需要進一步調查以確定其是否合理。
舉例來說,去年CPS Technologies的收益有所下降,這根本不理想。一種可能性是市盈率居高不下,因爲投資者認爲該公司的表現仍足以在不久的將來跑贏大盤。如果不是,那麼現有股東可能會對股價的可行性感到非常擔憂。
我們沒有分析師的預測,但您可以查看我們關於CPS Technologies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。CPS Technologies的增長是否足夠?
爲了證明其市盈率是合理的,CPS Technologies需要在超過市場的情況下實現可觀的增長。
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37%。但是,在此之前的幾年非常強勁,這意味着它在過去三年中仍然能夠將每股收益總額增長38%,令人印象深刻。因此,儘管股東們本來希望保持盈利,但他們可能會對中期收益增長率表示歡迎。
將最近的中期收益軌跡與整個市場對11%的擴張預測進行權衡,可以看出,按年計算大致相同。
有了這些信息,我們發現有趣的是,與市場相比,CPS Technologies的市盈率很高。顯然,該公司的許多投資者比最近所表示的更加看漲,並且不願意立即放棄股票。但是,由於近期收益趨勢的延續最終將壓低股價,因此很難實現額外的收益。
CPS Technologies 市盈率的底線
儘管最近股價疲軟,但CPS Technologies的市盈率仍然高於大多數其他公司。通常,在做出投資決策時,我們謹慎行事,不要過多地解讀市盈率,儘管這可以充分揭示其他市場參與者對公司的看法。
我們對CPS Technologies的審查顯示,其三年收益趨勢對其高市盈率的影響沒有我們預期的那麼大,因爲它們看起來與當前的市場預期相似。目前,我們對高市盈率感到不舒服,因爲這種收益表現不太可能長期支撐這種積極情緒。如果最近的中期收益趨勢持續下去,將使股東的投資面臨風險,潛在投資者面臨支付不必要的溢價的危險。
還值得注意的是,我們已經發現了CPS科技的2個警告信號,你需要考慮這些信號。
如果這些風險讓你重新考慮你對CPS Technologies的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
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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