Shanghai Shen Lian Biomedical Corporation (SHSE:688098) shares have had a really impressive month, gaining 27% after a shaky period beforehand. But not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 19% in the last twelve months.
Following the firm bounce in price, Shanghai Shen Lian Biomedical may be sending bearish signals at the moment with its price-to-earnings (or "P/E") ratio of 43.9x, since almost half of all companies in China have P/E ratios under 34x and even P/E's lower than 20x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's lofty.
As an illustration, earnings have deteriorated at Shanghai Shen Lian Biomedical over the last year, which is not ideal at all. It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/E from collapsing. If not, then existing shareholders may be quite nervous about the viability of the share price.
Check out our latest analysis for Shanghai Shen Lian Biomedical
SHSE:688098 Price Based on Past Earnings November 9th 2022 We don't have analyst forecasts, but you can see how recent
trends are setting up the company for the future by checking out our
free report on Shanghai Shen Lian Biomedical's earnings, revenue and cash flow.
What Are Growth Metrics Telling Us About The High P/E?
Shanghai Shen Lian Biomedical's 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 a frustrating 42% decrease to the company's bottom line. The last three years don't look nice either as the company has shrunk EPS by 21% in aggregate. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Comparing that to the market, which is predicted to deliver 45% growth in the next 12 months, the company's downward momentum based on recent medium-term earnings results is a sobering picture.
With this information, we find it concerning that Shanghai Shen Lian Biomedical is trading at a P/E higher than the market. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. 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
Shanghai Shen Lian Biomedical's P/E is getting right up there since its shares have risen strongly. 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 Shanghai Shen Lian Biomedical 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. 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. Unless the recent medium-term conditions improve markedly, it's very challenging to accept these prices as being reasonable.
It is also worth noting that we have found 3 warning signs for Shanghai Shen Lian Biomedical (1 doesn't sit too well with us!) that you need to take into consideration.
If you're unsure about the strength of Shanghai Shen Lian Biomedical's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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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.
上海申聯生物醫藥公司(上海證券交易所:688098)股票經歷了一個令人印象深刻的一個月,在經歷了一段不穩定的時期後上漲了27%。但並不是所有的股東都會感到歡欣鼓舞,因為在過去的12個月裏,該公司股價仍下跌了非常令人失望的19%。
隨着股價的強勁反彈,上海申聯生物醫藥目前可能發出了看跌信號,其市盈率為43.9倍,因為中國幾乎一半的公司的市盈率低於34倍,即使市盈率低於20倍也並不罕見。然而,僅僅從表面上看待市盈率是不明智的,因為可能會有一個解釋為什麼它是高的。
舉個例子,上海申聯生物醫藥過去一年的盈利狀況一直在惡化,這一點都不理想。許多人可能預計,該公司在未來一段時間內的表現仍將好於大多數其他公司,這使得市盈率沒有崩潰。如果不是,那麼現有股東可能會對股價的生存能力感到相當緊張。
查看我們對上海申聯生物醫藥的最新分析
上海證券交易所:688098價格基於過去的收益2022年11月9日我們沒有分析師的預測,但你可以通過查看我們的
免費上海申聯生物醫藥的收益、收入和現金流報告。
增長指標告訴我們關於高市盈率的哪些信息?
對於一家有望實現穩健增長、重要的是表現好於市場的公司來説,上海申聯生物醫藥的市盈率將是典型的。
回顧過去一年,該公司的利潤令人沮喪地下降了42%。過去三年看起來也不妙,因為該公司每股收益總計縮水了21%。因此,公平地説,最近的收益增長對公司來説是不可取的。
與預計未來12個月將實現45%增長的市場相比,根據最近的中期收益結果,該公司的下行勢頭令人警醒。
有了這些信息,我們發現上海申聯生物醫藥的市盈率高於大盤。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。只有最大膽的人才會認為這些價格是可持續的,因為最近盈利趨勢的延續最終可能會對股價造成沉重壓力。
關鍵的外賣
上海申聯生物醫藥的市盈率正在上升,因為它的股價已經強勁上漲。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。
我們對上海申聯生物醫藥的調查顯示,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樣大。當我們看到盈利出現倒退,表現遜於市場預期時,我們懷疑股價有下跌的風險,導致高市盈率走低。除非最近的中期狀況明顯改善,否則要接受這些價格是合理的是非常具有挑戰性的。
同樣值得注意的是,我們發現上海申聯生物醫藥的三個警示(%1與我們的關係不太好!)這是你需要考慮的。
如果你.不確定上海申聯生物醫藥的業務實力,為什麼不探索我們的互動名單與堅實的業務基本面為其他一些公司,你可能有不及預期的期望。
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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。