Snack Empire Holdings Limited (HKG:1843) shareholders would be excited to see that the share price has had a great month, posting a 40% gain and recovering from prior weakness. But the gains over the last month weren't enough to make shareholders whole, as the share price is still down 3.9% in the last twelve months.
After such a large jump in price, Snack Empire Holdings' price-to-earnings (or "P/E") ratio of 18.6x might make it look like a strong sell right now compared to the market in Hong Kong, where around half of the companies have P/E ratios below 9x and even P/E's below 5x are quite common. 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.
Recent times have been quite advantageous for Snack Empire Holdings as its earnings have been rising very briskly. It seems that many are expecting the strong earnings performance to beat most other companies over the coming period, which has increased investors' willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.
See our latest analysis for Snack Empire Holdings
SEHK:1843 Price Based on Past Earnings July 22nd 2022 Although there are no analyst estimates available for Snack Empire Holdings, take a look at this
free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
Does Growth Match The High P/E?
In order to justify its P/E ratio, Snack Empire Holdings would need to produce outstanding growth well in excess of the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 173% last year. Still, incredibly EPS has fallen 6.4% in total from three years ago, which is quite disappointing. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
In contrast to the company, the rest of the market is expected to grow by 15% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
In light of this, it's alarming that Snack Empire Holdings' P/E sits above the majority of other companies. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. Only the boldest would assume these prices are sustainable as a continuation of recent earnings trends is likely to weigh heavily on the share price eventually.
The Key Takeaway
The strong share price surge has got Snack Empire Holdings' P/E rushing to great heights as well. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We've established that Snack Empire Holdings currently trades on a much higher than expected P/E since its recent earnings have been in decline over the medium-term. When we see earnings heading backwards and underperforming the market forecasts, we suspect the share price is at risk of declining, sending the high P/E lower. If recent medium-term earnings trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Don't forget that there may be other risks. For instance, we've identified 4 warning signs for Snack Empire Holdings (1 is a bit unpleasant) you should be aware of.
You might be able to find a better investment than Snack Empire Holdings. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a P/E below 20x (but have proven they can grow earnings).
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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.
小吃帝国控股有限公司(HKG:1843)股东将兴奋地看到股价在一个月内表现出色,上涨了40%,并从之前的疲软中恢复过来。但过去一个月的涨幅不足以让股东们变得完整,因为该公司股价在过去12个月里仍下跌了3.9%。
在股价大幅上涨后,零食帝国控股18.6倍的市盈率可能会让它看起来像是一个强劲的卖盘。在香港,大约一半的公司的市盈率低于9倍,甚至低于5倍的市盈率也很常见。然而,仅仅从表面上看待市盈率是不明智的,因为可能会有一个解释,为什么它如此之高。
最近对零食帝国控股公司来说是相当有利的,因为它的收益一直在快速增长。似乎很多人都预计,苹果强劲的盈利表现将在未来一段时间内超过大多数其他公司,这增加了投资者买入该股的意愿。如果不是,那么现有股东可能会对股价的生存能力感到有点紧张。
查看我们对零食帝国控股公司的最新分析
联交所:1843基于过去收益的价格2022年7月22日虽然没有分析师对零食帝国控股公司的估计,但看看这个。
免费丰富的数据可视化,看看公司的收益、收入和现金流是如何堆积的。
增长是否与高市盈率相匹配?
为了证明其市盈率是合理的,零食帝国控股公司需要实现远远超出市场的出色增长。
首先回顾一下,我们看到该公司去年每股收益增长了173%,令人印象深刻。尽管如此,令人难以置信的是,每股收益比三年前总共下降了6.4%,这相当令人失望。因此,不幸的是,我们不得不承认,在这段时间里,该公司在盈利增长方面做得并不出色。
与该公司形成鲜明对比的是,市场其他部分预计明年将增长15%,这确实让人对该公司最近中期收益的下降有了正确的认识。
有鉴于此,零食帝国控股公司的市盈率高于其他大多数公司,这是令人担忧的。显然,该公司的许多投资者比最近的情况所显示的要乐观得多,不愿以任何价格抛售他们的股票。只有最大胆的人才会认为这些价格是可持续的,因为最近盈利趋势的延续最终可能会对股价造成沉重压力。
关键的外卖
强劲的股价飙升也使零食帝国控股的市盈率飙升至极高水平。有人认为,市盈率是衡量某些行业价值的次要指标,但它可以成为一个强大的商业信心指标。
我们已经确定,Snack Empire Holdings目前的市盈率远远高于预期,因为它最近的收益在中期内一直在下降。当我们看到盈利出现倒退,表现逊于市场预期时,我们怀疑股价有下跌的风险,导致高市盈率走低。如果近期的中期盈利趋势持续下去,将使股东的投资面临重大风险,潜在投资者面临支付过高溢价的危险。
别忘了,可能还有其他风险。例如,我们已经确定零食帝国控股公司的4个警告信号(1有点令人不快)你应该知道。
你也许能找到比零食帝国控股更好的投资。如果您想要选择可能的候选人,请查看以下内容免费令人感兴趣的市盈率低于20倍的公司名单(但已证明它们可以增加收益)。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。