With a median price-to-earnings (or "P/E") ratio of close to 17x in the United States, you could be forgiven for feeling indifferent about IDACORP, Inc.'s (NYSE:IDA) P/E ratio of 17.5x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.
With its earnings growth in positive territory compared to the declining earnings of most other companies, IDACORP has been doing quite well of late. It might be that many expect the strong earnings performance to deteriorate like the rest, which has kept the P/E from rising. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.
NYSE:IDA Price to Earnings Ratio vs Industry April 13th 2024
If you'd like to see what analysts are forecasting going forward, you should check out our free report on IDACORP.
What Are Growth Metrics Telling Us About The P/E?
There's an inherent assumption that a company should be matching the market for P/E ratios like IDACORP's to be considered reasonable.
Retrospectively, the last year delivered virtually the same number to the company's bottom line as the year before. Still, the latest three year period was better as it's delivered a decent 9.8% overall rise in EPS. So it appears to us that the company has had a mixed result in terms of growing earnings over that time.
Turning to the outlook, the next three years should generate growth of 5.6% per year as estimated by the six analysts watching the company. That's shaping up to be materially lower than the 10% per annum growth forecast for the broader market.
With this information, we find it interesting that IDACORP is trading at a fairly similar P/E to the market. Apparently many investors in the company are less bearish than analysts indicate and aren't willing to let go of their stock right now. These shareholders may be setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.
The Bottom Line On IDACORP's P/E
It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We've established that IDACORP currently trades on a higher than expected P/E since its forecast growth is lower than the wider market. Right now we are uncomfortable with the P/E as the predicted future earnings aren't likely to support a more positive sentiment for long. Unless these conditions improve, it's challenging to accept these prices as being reasonable.
We don't want to rain on the parade too much, but we did also find 2 warning signs for IDACORP (1 makes us a bit uncomfortable!) that you need to be mindful of.
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).
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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.
美國的市盈率中位數接近 17 倍,因此您對 IDACORP, Inc.(紐約證券交易所股票代碼:IDA)的市盈率感到無所謂也是情有可原的。 17.5 倍。但是,如果市盈率沒有合理的基礎,投資者可能會忽略明顯的機會或潛在的挫折。
與大多數其他公司的收益下降相比,IDACORP的收益增長處於正值區間,最近表現良好。許多人可能預計,強勁的收益表現將像其他人一樣惡化,這阻礙了市盈率的上升。如果你喜歡這家公司,你希望情況並非如此,這樣你就有可能在它不太受青睞的情況下買入一些股票。
紐約證券交易所:IDA 對比行業的市盈率 2024 年 4 月 13 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IDACORP的免費報告。
關於市盈率,增長指標告訴我們什麼?
人們固有的假設是,一家公司應該匹配市場,這樣像IDACORP這樣的市盈率才算合理。
回顧過去,去年的公司利潤幾乎與前一年相同。儘管如此,最近三年表現更好,因爲其每股收益總體增長了9.8%。因此,在我們看來,該公司的收益增長好壞參半。
展望來看,根據關注該公司的六位分析師的估計,未來三年將實現每年5.6%的增長。這將大大低於整個市場每年10%的增長預期。
有了這些信息,我們發現有趣的是,IDACORP的交易市盈率與市場相當相似。顯然,該公司的許多投資者沒有分析師所表示的那麼看跌,並且不願意立即放棄股票。如果市盈率降至更符合增長前景的水平,這些股東可能會爲未來的失望做好準備。
IDACORP 市盈率的底線
有人認爲,市盈率是衡量某些行業價值的次要指標,但它可能是一個有力的商業情緒指標。
我們已經確定,IDACORP目前的市盈率高於預期,因爲其預測的增長低於整個市場。目前,我們對市盈率感到不舒服,因爲預期的未來收益不太可能長期支撐更積極的情緒。除非這些條件有所改善,否則很難接受這些合理的價格。
我們不想在遊行隊伍中下太多雨,但我們還發現了 IDACORP 的 2 個警告標誌(1 個讓我們有點不舒服!)你需要注意的。
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。
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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。