Subdued Growth No Barrier To Skyline Champion Corporation's (NYSE:SKY) Price
Subdued Growth No Barrier To Skyline Champion Corporation's (NYSE:SKY) Price
Skyline Champion Corporation's (NYSE:SKY) price-to-earnings (or "P/E") ratio of 24.1x might make it look like a sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 17x and even P/E's below 9x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
With earnings that are retreating more than the market's of late, Skyline Champion has been very sluggish. It might be that many expect the dismal earnings performance to recover substantially, which has kept the P/E from collapsing. If not, then existing shareholders may be very nervous about the viability of the share price.
Keen to find out how analysts think Skyline Champion's future stacks up against the industry? In that case, our free report is a great place to start.What Are Growth Metrics Telling Us About The High P/E?
In order to justify its P/E ratio, Skyline Champion would need to produce impressive growth in excess of the market.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 53%. Still, the latest three year period has seen an excellent 247% overall rise in EPS, in spite of its unsatisfying short-term performance. 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.
Turning to the outlook, the next year should bring diminished returns, with earnings decreasing 11% as estimated by the six analysts watching the company. That's not great when the rest of the market is expected to grow by 11%.
With this information, we find it concerning that Skyline Champion is trading at a P/E higher than the market. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. There's a very good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the negative growth outlook.
The Bottom Line On Skyline Champion's 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 Skyline Champion currently trades on a much higher than expected P/E for a company whose earnings are forecast to decline. When we see a poor outlook with earnings heading backwards, we suspect the share price is at risk of declining, sending the high P/E lower. This places shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
You should always think about risks. Case in point, we've spotted 1 warning sign for Skyline Champion you should be aware of.
If you're unsure about the strength of Skyline Champion's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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.
與美國市場相比,Skyline Champion Corporation(紐約證券交易所代碼:SKY)的市盈率(或 “市盈率”)爲24.1倍,目前可能看起來像賣出,美國約有一半的公司的市盈率低於17倍,甚至市盈率低於9倍也很常見。儘管如此,我們需要更深入地挖掘以確定市盈率上升是否有合理的基礎。
Skyline Champion的收益下降幅度超過了最近的市場水平,因此一直非常疲軟。許多人可能預計,慘淡的收益表現將大幅恢復,這阻止了市盈率的暴跌。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Skyline Champion的未來與行業背道而馳嗎?在這種情況下,我們的免費報告是一個很好的起點。關於高市盈率,增長指標告訴我們什麼?
爲了證明其市盈率是合理的,Skyline Champion需要在超過市場的情況下實現可觀的增長。
首先回顧一下,該公司去年的每股收益增長並不令人興奮,因爲它公佈了令人失望的53%的跌幅。儘管如此,儘管短期表現不令人滿意,但最近三年的每股收益總體增長了247%。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。
談到前景,明年的回報應該會減少,根據關注該公司的六位分析師的估計,收益將下降11%。當其他市場預計將增長11%時,這並不好。
有了這些信息,我們發現Skyline Champion的交易市盈率高於市場。看來大多數投資者都希望公司的業務前景出現轉機,但分析師對這種情況會發生的信心不大。如果市盈率降至更符合負增長前景的水平,這些股東很有可能爲未來的失望做好準備。
Skyline Champion 市盈率的底線
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,對於一家預計收益將下降的公司,Skyline Champion目前的市盈率遠高於預期。當我們看到前景不佳,收益倒退時,我們懷疑股價有下跌的風險,導致高市盈率走低。這使股東的投資面臨重大風險,潛在投資者面臨支付過高溢價的危險。
你應該時刻考慮風險。舉個例子,我們發現了 Skyline Champion 的 1 個警告標誌,你應該注意了。
如果您不確定Skyline Champion的業務實力,爲什麼不瀏覽我們的互動式股票清單,其中列出了一些您可能錯過的其他公司,這些股票具有穩健的業務基本面。
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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