China Science Publishing & Media Ltd. (SHSE:601858) Shares May Have Slumped 26% But Getting In Cheap Is Still Unlikely
China Science Publishing & Media Ltd. (SHSE:601858) Shares May Have Slumped 26% But Getting In Cheap Is Still Unlikely
The China Science Publishing & Media Ltd. (SHSE:601858) share price has softened a substantial 26% over the previous 30 days, handing back much of the gains the stock has made lately. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 39% in that time.
Although its price has dipped substantially, China Science Publishing & Media may still be sending bearish signals at the moment with its price-to-earnings (or "P/E") ratio of 36.8x, since almost half of all companies in China have P/E ratios under 29x and even P/E's lower than 18x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
Recent earnings growth for China Science Publishing & Media has been in line with the market. One possibility is that the P/E is high because investors think this modest earnings performance will accelerate. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Keen to find out how analysts think China Science Publishing & Media's future stacks up against the industry? In that case, our free report is a great place to start.How Is China Science Publishing & Media's Growth Trending?
There's an inherent assumption that a company should outperform the market for P/E ratios like China Science Publishing & Media's to be considered reasonable.
Taking a look back first, we see that there was hardly any earnings per share growth to speak of for the company over the past year. Whilst it's an improvement, it wasn't enough to get the company out of the hole it was in, with earnings down 1.2% overall from three years ago. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
Turning to the outlook, the next year should generate growth of 13% as estimated by the one analyst watching the company. That's shaping up to be materially lower than the 35% growth forecast for the broader market.
With this information, we find it concerning that China Science Publishing & Media 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 good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.
The Final Word
Despite the recent share price weakness, China Science Publishing & Media's P/E remains higher than most other companies. Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
We've established that China Science Publishing & Media currently trades on a much higher than expected P/E since its forecast growth is lower than the wider market. When we see a weak earnings outlook with slower than market growth, we suspect the share price is at risk of declining, sending the high P/E lower. Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with China Science Publishing & Media, and understanding should be part of your investment process.
If you're unsure about the strength of China Science Publishing & Media'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.
中國科學出版傳媒有限公司(SHSE: 601858)的股價在過去30天中大幅下跌了26%,收回了該股最近的大部分漲幅。過去30天的下跌結束了股東艱難的一年,當時股價下跌了39%。
儘管其價格已大幅下跌,但中國科學出版傳媒目前可能仍在發出看跌信號,其市盈率(或 “市盈率”)爲36.8倍,因爲幾乎一半的中國公司的市盈率低於29倍,即使市盈率低於18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上升是否有合理的基礎。
中國科學出版傳媒最近的收益增長與市場持平。一種可能性是市盈率居高不下,因爲投資者認爲這種溫和的收益表現將加速。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想了解分析師如何看待中國科學出版傳媒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。中國科學出版傳媒的增長趨勢如何?
人們固有的假設是,如果像中國科學出版傳媒這樣的市盈率才算合理,公司的表現應該優於市場。
首先回顧一下,我們發現,在過去的一年中,該公司的每股收益幾乎沒有任何增長可言。儘管有所改善,但這還不足以使公司擺脫困境,總體收益比三年前下降了1.2%。因此,不幸的是,我們必須承認,在這段時間內,該公司在增加收益方面做得不好。
談到前景,一位關注該公司的分析師估計,明年將實現13%的增長。這將大大低於整個市場35%的增長預期。
有了這些信息,我們發現中國科學出版傳媒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。
最後一句話
儘管最近股價疲軟,但中國科學出版傳媒的市盈率仍然高於大多數其他公司。通常,我們的傾向是將市盈率的使用限制在確定市場對公司整體健康狀況的看法上。
我們已經確定,中國科學出版傳媒目前的市盈率遠高於預期,因爲其預測的增長低於整個市場。當我們看到疲軟的盈利前景且低於市場增長速度時,我們懷疑股價有下跌的風險,導致高市盈率走低。除非這些條件顯著改善,否則將這些價格視爲合理是非常困難的。
始終有必要考慮永遠存在的投資風險幽靈。我們已經向《中國科學出版傳媒》確定了1個警告信號,理解應該是您投資過程的一部分。
如果您不確定中國科學出版傳媒的業務實力,爲什麼不瀏覽我們的互動股票清單,這些股票具有穩健的商業基本面,其中列出了您可能錯過的其他一些公司。
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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