Why Investors Shouldn't Be Surprised By The Cooper Companies, Inc.'s (NASDAQ:COO) P/E
Why Investors Shouldn't Be Surprised By The Cooper Companies, Inc.'s (NASDAQ:COO) P/E
With a price-to-earnings (or "P/E") ratio of 68.8x The Cooper Companies, Inc. (NASDAQ:COO) may be sending very bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 16x and even P/E's lower than 9x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
Cooper Companies has been struggling lately as its earnings have declined faster than most other companies. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. If not, then existing shareholders may be very nervous about the viability of the share price.
Keen to find out how analysts think Cooper Companies' future stacks up against the industry? In that case, our free report is a great place to start.How Is Cooper Companies' Growth Trending?
The only time you'd be truly comfortable seeing a P/E as steep as Cooper Companies' is when the company's growth is on track to outshine the market decidedly.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 23%. The last three years don't look nice either as the company has shrunk EPS by 87% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
Turning to the outlook, the next three years should generate growth of 36% per annum as estimated by the analysts watching the company. With the market only predicted to deliver 10% per year, the company is positioned for a stronger earnings result.
In light of this, it's understandable that Cooper Companies' 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.
The Final Word
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.
We've established that Cooper Companies 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.
A lot of potential risks can sit within a company's balance sheet. Our free balance sheet analysis for Cooper Companies with six simple checks will allow you to discover any risks that could be an issue.
It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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.
由於市盈率(或 “市盈率”)爲68.8倍,庫珀公司(納斯達克股票代碼:COO)目前可能發出了非常看跌的信號,因爲美國幾乎有一半的公司的市盈率低於16倍,甚至市盈率低於9倍也並不罕見。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。
庫珀公司最近一直在苦苦掙扎,因爲其收益下降速度快於大多數其他公司。一種可能性是市盈率居高不下,因爲投資者認爲該公司將徹底扭轉局面,加速超越市場上的大多數其他公司。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。
想了解分析師如何看待庫珀公司的未來與該行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。庫珀公司的增長趨勢如何?
只有當公司的增長有望在市場上大放異彩時,你才能真正放心地看到像庫珀公司一樣高的市盈率。
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23%。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87%。因此,不幸的是,我們必須承認,在此期間,該公司在增加收益方面做得不好。
談到前景,根據關注該公司的分析師的估計,未來三年將實現每年36%的增長。由於預計市場每年僅增長10%,該公司有望實現更強勁的盈利業績。
有鑑於此,庫珀公司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。
最後一句話
雖然市盈率不應該是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。
我們已經確定,Cooper Companies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。
公司的資產負債表中可能存在許多潛在風險。我們通過六張簡單支票對庫珀公司的免費資產負債表分析將使您發現任何可能存在問題的風險。
重要的是要確保你尋找一家優秀的公司,而不僅僅是你遇到的第一個想法。因此,來看看這份免費名單,列出了最近收益增長強勁(市盈率低)的有趣公司。
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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