When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 18x, you may consider Victory Capital Holdings, Inc. (NASDAQ:VCTR) as an attractive investment with its 14.4x 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.
Victory Capital Holdings certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It might be that many expect the strong earnings performance to degrade substantially, possibly more than the market, which has repressed the P/E. 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.
Keen to find out how analysts think Victory Capital Holdings' future stacks up against the industry? In that case, our free report is a great place to start.
How Is Victory Capital Holdings' Growth Trending?
In order to justify its P/E ratio, Victory Capital Holdings would need to produce sluggish growth that's trailing the market.
Taking a look back first, we see that the company managed to grow earnings per share by a handy 6.7% last year. Although, the latest three year period in total hasn't been as good as it didn't manage to provide any growth at all. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.
Shifting to the future, estimates from the eight analysts covering the company suggest earnings should grow by 15% each year over the next three years. With the market only predicted to deliver 10% per annum, the company is positioned for a stronger earnings result.
In light of this, it's peculiar that Victory Capital Holdings' 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 Bottom Line On Victory Capital Holdings' 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.
We've established that Victory Capital Holdings currently trades on a much lower than expected P/E since its forecast growth is higher than the wider market. There could be some major unobserved threats to earnings preventing the P/E ratio from matching the positive outlook. At least price risks look to be very low, but investors seem to think future earnings could see a lot of volatility.
Before you settle on your opinion, we've discovered 2 warning signs for Victory Capital Holdings that you should be aware of.
You might be able to find a better investment than Victory Capital Holdings. 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.
當接近一半的美國公司的市盈率(或「P/E」)超過18倍時,您可以考慮購買Victory Capital Holdings, Inc.(納斯達克股票代碼:VCTR),因其14.4倍的市盈率而成爲有吸引力的投資。儘管如此,僅憑市盈率並不明智,因爲它可能有限制的解釋。
近期Victory Capital Holdings做得不錯,因爲其盈利增長率保持正值,而大多數其他公司的收益則表現疲軟。許多人可能認爲該公司強勁的盈利表現將嚴重下降,甚至可能超過了市場的預期,這就壓低了市盈率。如果您喜歡這家公司,您希望這種情況不是事實,這樣您就可以在它不受歡迎時買一些股票。
想了解分析師如何看待Victory Capital Holdings的未來與行業的比較嗎?那麼,我們的免費報告是一個開始的好地方。
Victory Capital Holdings的增長趨勢如何?
爲了證明其市盈率的合理性,Victory Capital Holdings需要產生落後於市場的低增長。