Why Investors Shouldn't Be Surprised By Bloomage BioTechnology Corporation Limited's (SHSE:688363) P/E
Why Investors Shouldn't Be Surprised By Bloomage BioTechnology Corporation Limited's (SHSE:688363) P/E
When close to half the companies in China have price-to-earnings ratios (or "P/E's") below 29x, you may consider Bloomage BioTechnology Corporation Limited (SHSE:688363) as a stock to avoid entirely with its 47.5x 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 so lofty.
Bloomage BioTechnology hasn't been tracking well recently as its declining earnings compare poorly to other companies, which have seen some growth on average. It might be that many expect the dour earnings performance to recover substantially, which has kept the P/E from collapsing. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Want the full picture on analyst estimates for the company? Then our free report on Bloomage BioTechnology will help you uncover what's on the horizon.Does Growth Match The High P/E?
There's an inherent assumption that a company should far outperform the market for P/E ratios like Bloomage BioTechnology's to be considered reasonable.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 40%. As a result, earnings from three years ago have also fallen 9.7% overall. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Turning to the outlook, the next year should generate growth of 49% as estimated by the ten analysts watching the company. With the market only predicted to deliver 35%, the company is positioned for a stronger earnings result.
In light of this, it's understandable that Bloomage BioTechnology'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.
What We Can Learn From Bloomage BioTechnology's P/E?
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 Bloomage BioTechnology's analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.
Having said that, be aware Bloomage BioTechnology is showing 2 warning signs in our investment analysis, you should know about.
If these risks are making you reconsider your opinion on Bloomage BioTechnology, 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.
當中國將近一半的公司的市盈率(或 “市盈率”)低於29倍時,你可以考慮將Bloomage Biotechnology Corporation Corporation Corporation(SHSE: 688363)作爲股票,以其47.5倍的市盈率完全避免。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如此之高。
Bloomage Biotechnology最近表現不佳,其收益下降與其他公司相比表現不佳,後者的平均增長幅度有所提高。許多人可能預計糟糕的收益表現將大幅恢復,這阻止了市盈率的暴跌。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想全面了解分析師對公司的估計嗎?然後,我們關於Bloomage Biotechnology的免費報告將幫助您發現即將發生的事情。增長與高市盈率相匹配嗎?
人們固有的假設是,如果像Bloomage Biotechnology這樣的市盈率被認爲是合理的,公司的表現應該遠遠超過市場。
首先回顧一下,該公司去年的每股收益增長並不令人興奮,因爲它公佈了令人失望的40%的跌幅。結果,三年前的總體收益也下降了9.7%。因此,可以公平地說,最近的收益增長對公司來說是不可取的。
談到前景,根據關注該公司的十位分析師的估計,明年將實現49%的增長。由於預計市場收益率僅爲35%,該公司有望實現更強勁的盈利業績。
有鑑於此,Bloomage Biotechnology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。
我們可以從Bloomage Biotechnology的市盈率中學到什麼?
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Bloomage Biotechnology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。在現階段,投資者認爲,收益惡化的可能性不足以證明降低市盈率是合理的。在這種情況下,很難看到股價在不久的將來會強勁下跌。
話雖如此,請注意,Bloomage Biotechnology在我們的投資分析中顯示了兩個警告信號,你應該知道。
如果這些風險讓你重新考慮你對Bloomage Biotechnology的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。
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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