M/I Homes, Inc.'s (NYSE:MHO) Shares Lagging The Market But So Is The Business
M/I Homes, Inc.'s (NYSE:MHO) Shares Lagging The Market But So Is The Business
With a price-to-earnings (or "P/E") ratio of 6.7x M/I Homes, Inc. (NYSE:MHO) may be sending very bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios greater than 17x and even P/E's higher than 32x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
M/I Homes has been struggling lately as its earnings have declined faster than most other companies. It seems that many are expecting the dismal earnings performance to persist, which has repressed the P/E. You'd much rather the company wasn't bleeding earnings if you still believe in the business. Or at the very least, you'd be hoping the earnings slide doesn't get any worse if your plan is to pick up some stock while it's out of favour.
Keen to find out how analysts think M/I Homes' future stacks up against the industry? In that case, our free report is a great place to start.Is There Any Growth For M/I Homes?
The only time you'd be truly comfortable seeing a P/E as depressed as M/I Homes' is when the company's growth is on track to lag the market decidedly.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 4.8%. However, a few very strong years before that means that it was still able to grow EPS by an impressive 100% in total over the last three years. 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.
Shifting to the future, estimates from the sole analyst covering the company suggest earnings growth is heading into negative territory, declining 2.4% over the next year. That's not great when the rest of the market is expected to grow by 11%.
In light of this, it's understandable that M/I Homes' P/E would sit below the majority of other companies. However, shrinking earnings are unlikely to lead to a stable P/E over the longer term. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.
The Final Word
We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
As we suspected, our examination of M/I Homes' analyst forecasts revealed that its outlook for shrinking earnings is contributing to its low P/E. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances.
And what about other risks? Every company has them, and we've spotted 1 warning sign for M/I Homes you should know about.
You might be able to find a better investment than M/I Homes. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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6.7倍,M/I Homes, Inc.(紐約證券交易所代碼:MHO)目前可能會發出非常看漲的信號,因爲美國幾乎有一半公司的市盈率大於17倍,甚至市盈率高於32倍也並不罕見。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅下降是否有合理的基礎。
由於其收益的下降速度快於大多數其他公司,M/I Homes最近一直處於困境。看來許多人預計慘淡的盈利表現將持續下去,這抑制了市盈率。如果你仍然相信該業務,你寧願公司不流失收益。或者至少,如果你的計劃是在失寵的時候買入一些股票,你希望收益下滑不會變得更糟。
想了解分析師如何看待M/I Homes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。M/I 房屋有增長嗎?
只有當公司的增長有望明顯落後於市場時,你才能真正放心地看到像M/I Homes一樣低迷的市盈率。
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4.8%。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100%,令人印象深刻。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。
展望未來,負責該公司的唯一分析師的估計表明,收益增長將進入負值區間,明年下降2.4%。當其他市場預計將增長11%時,這並不好。
有鑑於此,可以理解M/I Homes的市盈率將低於其他大多數公司。但是,從長遠來看,收益萎縮不太可能帶來穩定的市盈率。由於疲軟的前景壓低了股價,即使僅僅維持這些價格也可能難以實現。
最後一句話
我們可以說,市盈率的力量主要不是作爲估值工具,而是衡量當前投資者情緒和未來預期。
正如我們所懷疑的那樣,我們對M/I Homes分析師預測的審查顯示,其收益萎縮的前景是其低市盈率的原因。在現階段,投資者認爲,收益改善的可能性不足以證明更高的市盈率是合理的。在這種情況下,很難看到股價在不久的將來強勁上漲。
那其他風險呢?每家公司都有它們,我們發現了一個你應該知道的M/I Homes警告標誌。
你也許能找到比M/I Homes更好的投資。如果你想選擇可能的候選人,可以免費查看這份有趣的公司名單,這些公司的市盈率很低(但已經證明可以增加收益)。
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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