The Plover Bay Technologies Limited (HKG:1523) share price has done very well over the last month, posting an excellent gain of 25%. But the gains over the last month weren't enough to make shareholders whole, as the share price is still down 5.7% in the last twelve months.
Since its price has surged higher, Plover Bay Technologies' price-to-earnings (or "P/E") ratio of 12.5x might make it look like a sell right now compared to the market in Hong Kong, where around half of the companies have P/E ratios below 8x and even P/E's below 4x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
Plover Bay Technologies 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 seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Plover Bay Technologies.
How Is Plover Bay Technologies' Growth Trending?
Plover Bay Technologies' P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market.
Retrospectively, the last year delivered an exceptional 23% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 90% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Turning to the outlook, the next three years should generate growth of 15% each year as estimated by the lone analyst watching the company. Meanwhile, the rest of the market is forecast to expand by 16% per year, which is not materially different.
With this information, we find it interesting that Plover Bay Technologies is trading at a high P/E compared to the market. It seems most investors are ignoring the fairly average growth expectations and are willing to pay up for exposure to the stock. Although, additional gains will be difficult to achieve as this level of earnings growth is likely to weigh down the share price eventually.
The Final Word
Plover Bay Technologies' P/E is getting right up there since its shares have risen strongly. 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 Plover Bay Technologies currently trades on a higher than expected P/E since its forecast growth is only in line with the wider market. When we see an average earnings outlook with market-like growth, we suspect the share price is at risk of declining, sending the high P/E lower. This places shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
Don't forget that there may be other risks. For instance, we've identified 1 warning sign for Plover Bay Technologies that you should be aware of.
You might be able to find a better investment than Plover Bay Technologies. 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.
Plover Bay Technologies Limited(HKG: 1523)的股價在上個月表現良好,上漲了25%。但是,上個月的漲幅不足以使股東恢復健康,因爲股價在過去十二個月中仍下跌了5.7%。
由於價格飆升,Plover Bay Technologies的市盈率(或 “市盈率”)爲12.5倍,與香港市場相比,目前可能看起來像賣出。在香港,約有一半公司的市盈率低於8倍,甚至市盈率低於4倍也很常見。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。
Plover Bay Technologies最近確實做得很好,因爲其收益增長是正的,而大多數其他公司的收益卻在倒退。看來許多人預計該公司將繼續克服更廣泛的市場逆境,這增加了投資者購買股票的意願。你真的希望如此,否則你會無緣無故地付出相當大的代價。
如果你想了解分析師對未來的預測,你應該查看我們關於Plover Bay Technologies的免費報告。
千鳥灣科技的增長趨勢如何?
Plover Bay Technologies的市盈率對於一家有望實現穩健增長且重要的是表現好於市場的公司來說是典型的市盈率。