Hovnanian Enterprises, Inc. (NYSE:HOV) Might Not Be As Mispriced As It Looks
Hovnanian Enterprises, Inc. (NYSE:HOV) Might Not Be As Mispriced As It Looks
When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 18x, you may consider Hovnanian Enterprises, Inc. (NYSE:HOV) as a highly attractive investment with its 5.2x P/E ratio. However, the P/E might be quite low for a reason and it requires further investigation to determine if it's justified.
For instance, Hovnanian Enterprises' receding earnings in recent times would have to be some food for thought. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. However, if this doesn't eventuate then existing shareholders may be feeling optimistic about the future direction of the share price.
Although there are no analyst estimates available for Hovnanian Enterprises, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.Is There Any Growth For Hovnanian Enterprises?
Hovnanian Enterprises' P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
Retrospectively, the last year delivered a frustrating 1.4% decrease to the company's bottom line. Even so, admirably EPS has lifted 158% in aggregate from three years ago, notwithstanding the last 12 months. So we can start by confirming that the company has generally done a very good job of growing earnings over that time, even though it had some hiccups along the way.
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 peculiar that Hovnanian Enterprises' P/E sits below the majority of other companies. It looks like most investors are not convinced the company can maintain its recent growth rates.
The Final Word
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 Hovnanian Enterprises revealed its three-year earnings trends aren't contributing to its P/E anywhere near as much as we would have predicted, given they look better than current market expectations. When we see strong earnings with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. At least price risks look to be very low if recent medium-term earnings trends continue, but investors seem to think future earnings could see a lot of volatility.
And what about other risks? Every company has them, and we've spotted 2 warning signs for Hovnanian Enterprises you should know about.
If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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”)高於18倍時,您可以將Hovnanian Enterprises, Inc.(紐約證券交易所代碼:HOV)的市盈率爲5.2倍,是一項極具吸引力的投資。但是,市盈率可能很低是有原因的,需要進一步調查以確定其是否合理。
例如,霍夫納尼安企業最近收益的下降值得深思。許多人可能預計,令人失望的收益表現將持續或加速,這抑制了市盈率。但是,如果最終沒有出現這種情況,那麼現有股東可能會對股價的未來走向感到樂觀。
儘管沒有分析師對Hovnanian Enterprises的估計,但請看一下這個免費的數據豐富的可視化圖表,看看該公司的收益、收入和現金流是如何積累的。霍夫納尼亞企業有增長嗎?
Hovnanian Enterprises的市盈率對於一家預計增長非常糟糕甚至收益下降的公司來說是典型的,更重要的是,其表現要比市場差得多。
回顧過去,去年該公司的利潤下降了令人沮喪的1.4%。即便如此,儘管過去12個月,但每股收益總額仍比三年前增長了158%,令人欽佩。因此,我們可以首先確認該公司在此期間在增加收益方面總體上做得非常出色,儘管在此過程中遇到了一些小問題。
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,奇怪的是,Hovnanian Enterprises的市盈率低於大多數其他公司。看來大多數投資者都不相信該公司能夠維持其最近的增長率。
最後一句話
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。
我們對Hovnanian Enterprises的審查顯示,鑑於其三年收益趨勢看上去好於當前的市場預期,其市盈率的貢獻並沒有我們預期的那麼大。當我們看到強勁的收益和快於市場的增長速度時,我們假設潛在風險可能會給市盈率帶來巨大壓力。如果最近的中期收益趨勢持續下去,至少價格風險看起來很低,但投資者似乎認爲未來的收益可能會出現很大的波動。
那其他風險呢?每家公司都有它們,我們已經爲Hovnanian Enterprises發現了兩個警告信號,你應該知道。
如果你對市盈率感興趣,你可能希望看到這批盈利增長強勁、市盈率低的免費公司。
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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。
譯文內容由第三人軟體翻譯。
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