Bethel Automotive Safety Systems Co., Ltd (SHSE:603596) Screens Well But There Might Be A Catch
Bethel Automotive Safety Systems Co., Ltd (SHSE:603596) Screens Well But There Might Be A Catch
When close to half the companies in China have price-to-earnings ratios (or "P/E's") above 30x, you may consider Bethel Automotive Safety Systems Co., Ltd (SHSE:603596) as an attractive investment with its 25.5x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited.
With earnings growth that's superior to most other companies of late, Bethel Automotive Safety Systems has been doing relatively well. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward. 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 out of favour.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Bethel Automotive Safety Systems.How Is Bethel Automotive Safety Systems' Growth Trending?
The only time you'd be truly comfortable seeing a P/E as low as Bethel Automotive Safety Systems' is when the company's growth is on track to lag the market.
Retrospectively, the last year delivered an exceptional 26% gain to the company's bottom line. The latest three year period has also seen an excellent 82% overall rise in EPS, aided by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time.
Looking ahead now, EPS is anticipated to climb by 27% per annum during the coming three years according to the analysts following the company. With the market only predicted to deliver 21% each year, the company is positioned for a stronger earnings result.
In light of this, it's peculiar that Bethel Automotive Safety Systems' P/E sits below the majority of other companies. It looks like most investors are not convinced at all that the company can achieve future growth expectations.
The Key Takeaway
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.
We've established that Bethel Automotive Safety Systems currently trades on a much lower than expected P/E since its forecast growth is higher than the wider market. When we see a strong earnings outlook with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. It appears many are indeed anticipating earnings instability, because these conditions should normally provide a boost to the share price.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Bethel Automotive Safety Systems (at least 1 which is a bit unpleasant), and understanding them should be part of your investment process.
If these risks are making you reconsider your opinion on Bethel Automotive Safety Systems, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
當將近一半的中國公司的市盈率(或 “市盈率”)高於30倍時,您可以將伯特利汽車安全系統有限公司(SHSE:603596)的市盈率爲25.5倍作爲一項有吸引力的投資。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率有限。
伯特利汽車安全系統近期的收益增長優於大多數其他公司,因此表現相對較好。一種可能性是市盈率很低,因爲投資者認爲這種強勁的盈利表現今後可能不那麼令人印象深刻。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失寵的時候買入一些股票。
如果你想了解分析師對未來的預測,你應該查看我們關於伯特利汽車安全系統的免費報告。伯特利汽車安全系統的增長趨勢如何?
只有當公司的增長有望落後於市場時,你才能真正放心地看到像伯特利汽車安全系統一樣低的市盈率。
回顧過去,去年的公司利潤實現了26%的驚人增長。在短期表現的推動下,最近三年期間,每股收益總體增長了82%。因此,我們可以首先確認該公司在這段時間內在增加收益方面做得很好。
根據關注該公司的分析師的說法,展望未來,預計未來三年每股收益將每年增長27%。由於預計市場每年僅增長21%,該公司有望實現更強勁的盈利業績。
有鑑於此,伯特利汽車安全系統的市盈率低於其他大多數公司是很奇怪的。看來大多數投資者根本不相信公司能夠實現未來的增長預期。
關鍵要點
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。
我們已經確定,伯特利汽車安全系統目前的市盈率遠低於預期,因爲其預測的增長高於整個市場。當我們看到強勁的盈利前景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。看來許多人確實在預期收益不穩定,因爲這些條件通常應該會提振股價。
始終有必要考慮永遠存在的投資風險幽靈。我們已經確定了伯特利汽車安全系統的兩個警告信號(至少一個有點不愉快),了解它們應該是您投資過程的一部分。
如果這些風險讓你重新考慮你對伯特利汽車安全系統的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。
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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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