E. Bon Holdings Limited (HKG:599) shareholders won't be pleased to see that the share price has had a very rough month, dropping 29% and undoing the prior period's positive performance. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 29% in that time.
Even after such a large drop in price, given close to half the companies in Hong Kong have price-to-earnings ratios (or "P/E's") below 8x, you may still consider E. Bon Holdings as a stock to avoid entirely with its 14.4x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
E. Bon Holdings has been doing a good job lately as it's been growing earnings at a solid pace. One possibility is that the P/E is high because investors think this respectable earnings growth will be enough to outperform the broader market in the near future. If not, then existing shareholders may be a little nervous about the viability of the share price.
See our latest analysis for E. Bon Holdings
SEHK:599 Price Based on Past Earnings October 9th 2022 Although there are no analyst estimates available for E. Bon 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, E. Bon Holdings would need to produce outstanding growth well in excess of the market.
Retrospectively, the last year delivered a decent 10% gain to the company's bottom line. Still, lamentably EPS has fallen 21% in aggregate from three years ago, which is disappointing. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Weighing that medium-term earnings trajectory against the broader market's one-year forecast for expansion of 20% shows it's an unpleasant look.
In light of this, it's alarming that E. Bon Holdings' P/E sits above the majority of other companies. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a very good chance existing shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the recent negative growth rates.
What We Can Learn From E. Bon Holdings' P/E?
Even after such a strong price drop, E. Bon Holdings' P/E still exceeds the rest of the market significantly. 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.
Our examination of E. Bon Holdings revealed its shrinking earnings over the medium-term aren't impacting its high P/E anywhere near as much as we would have predicted, given the market is set to grow. Right now we are increasingly uncomfortable with the high P/E as this earnings performance is highly unlikely to support such positive sentiment for long. 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.
Plus, you should also learn about these 4 warning signs we've spotted with E. Bon Holdings (including 1 which is significant).
Of course, you might also be able to find a better stock than E. Bon Holdings. So you may wish to see this free collection of other companies that sit on P/E's below 20x and have grown earnings strongly.
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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.
宜邦集團有限公司(HKG:599)股東不會樂於看到股價經歷了非常艱難的一個月,下跌了29%,抹去了前一段時間的積極表現。過去30天的下跌為股東們艱難的一年畫上了句號,股價在此期間下跌了29%。
即使股價下跌如此之大,考慮到香港近一半的公司的市盈率(或“市盈率”)低於8倍,你仍可能認為宜邦控股是一隻完全避免上市的股票,其市盈率為14.4倍。儘管如此,我們還需要更深入地挖掘,以確定市盈率大幅上升是否有合理的基礎。
E.Bon Holdings最近一直做得很好,因為它的收益一直在穩步增長。一種可能性是,市盈率很高,因為投資者認為,這種可觀的收益增長在不久的將來將足以跑贏大盤。如果不是,那麼現有股東可能會對股價的生存能力感到有點緊張。
查看我們對E.Bon Holdings的最新分析
聯交所:599基於過去收益的價格2022年10月9日雖然沒有分析師對易邦控股的估計,但看看這個。
免費豐富的數據可視化,看看公司的收益、收入和現金流是如何堆積的。
增長是否與高市盈率相匹配?
為了證明其市盈率是合理的,E.Bon Holdings需要實現遠遠超出市場的出色增長。
回顧過去一年,該公司的利潤實現了10%的可觀增長。儘管如此,令人遺憾的是,每股收益與三年前相比總共下降了21%,這令人失望。因此,股東們會對中期盈利增長率感到悲觀。
將這一中期收益軌跡與大盤一年增長20%的預期進行比較,可以看出這是一個令人不快的前景。
有鑑於此,E.Bon Holdings的市盈率高於其他大多數公司,這令人擔憂。似乎大多數投資者都忽視了最近糟糕的增長率,並希望該公司的業務前景有所好轉。如果市盈率下降到與最近負增長更一致的水平,現有股東很有可能會讓自己未來感到失望。
我們可以從易邦控股的市盈率中學到什麼?
即使在如此強勁的價格下跌之後,E.Bon Holdings的市盈率仍然遠遠高於市場的其他股票。有人認為,市盈率是衡量某些行業價值的次要指標,但它可以成為一個強大的商業信心指標。
我們對E.Bon Holdings的調查顯示,考慮到市場將會增長,該公司中期收益的縮水對其高市盈率的影響並不像我們預期的那麼大。目前,我們對高市盈率越來越感到不安,因為這種盈利表現不太可能長期支持這種積極情緒。如果近期的中期盈利趨勢持續下去,將使股東的投資面臨重大風險,潛在投資者面臨支付過高溢價的危險。
另外,你還應該瞭解這些我們在E.Bon Holdings發現了4個警告信號(包括有意義的1)。
當然了,你也許還能找到一隻比E.Bon Holdings更好的股票。所以你可能想看看這個免費市盈率低於20倍、盈利增長強勁的其他公司的集合。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。