Fidelity National Financial, Inc.'s (NYSE:FNF) Share Price Matching Investor Opinion
Fidelity National Financial, Inc.'s (NYSE:FNF) Share Price Matching Investor Opinion
With a price-to-earnings (or "P/E") ratio of 24.8x Fidelity National Financial, Inc. (NYSE:FNF) 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. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.
Fidelity National Financial 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. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
NYSE:FNF Price to Earnings Ratio vs Industry April 18th 2024
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Fidelity National Financial.
What Are Growth Metrics Telling Us About The High P/E?
In order to justify its P/E ratio, Fidelity National Financial would need to produce outstanding growth well in excess of the market.
Retrospectively, the last year delivered a frustrating 59% decrease to the company's bottom line. As a result, earnings from three years ago have also fallen 63% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Shifting to the future, estimates from the four analysts covering the company suggest earnings should grow by 137% over the next year. That's shaping up to be materially higher than the 11% growth forecast for the broader market.
In light of this, it's understandable that Fidelity National Financial's 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 Key Takeaway
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.
As we suspected, our examination of Fidelity National Financial's analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. Unless these conditions change, they will continue to provide strong support to the share price.
We don't want to rain on the parade too much, but we did also find 3 warning signs for Fidelity National Financial that you need to be mindful of.
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.
Fidelity National Financial, Inc.(紐約證券交易所代碼:FNF)的市盈率(或"P/E")爲24.8倍,目前可能發出了非常看跌的信號,因爲美國幾乎有一半公司的市盈率低於16倍,即使市淨率低於9倍也並不罕見。但是,市盈率可能相當高是有原因的,需要進一步調查以確定其是否合理。
富達國家金融最近一直處於困境,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。你真的希望如此,否則你會無緣無故地付出相當大的代價。
紐約證券交易所:FNF對比行業的市盈率 2024年4月18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富達國家金融的免費報告。
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,富達國民金融需要實現遠遠超過市場的出色增長。
回顧過去,去年該公司的利潤下降了59%,令人沮喪。結果,三年前的總體收益也下降了63%。因此,股東會對中期收益增長率感到悲觀。
展望未來,報道該公司的四位分析師的估計表明,明年收益將增長137%。這將大大高於整個市場11%的增長預期。
有鑑於此,富達國民金融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。
關鍵要點
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。
正如我們所懷疑的那樣,我們對富達國家金融分析師預測的審查顯示,其優異的盈利前景是其高市盈率的原因。目前,股東對市盈率感到滿意,因爲他們非常有信心未來的收益不會受到威脅。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。
我們不想在遊行隊伍中下太多雨,但我們也確實發現了富達國民金融的三個警告信號,你需要注意。
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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