Boot Barn Holdings, Inc.'s (NYSE:BOOT) price-to-earnings (or "P/E") ratio of 14.4x might make it look like a buy right now compared to the market in the United States, where around half of the companies have P/E ratios above 17x and even P/E's above 33x 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 limited.
Recent times haven't been advantageous for Boot Barn Holdings as its earnings have been falling quicker than most other companies. It seems that many are expecting the dismal earnings performance to persist, which has repressed the P/E. You'd much rather the company wasn't bleeding earnings if you still believe in the business. If not, then existing shareholders will probably struggle to get excited about the future direction of the share price.
View our latest analysis for Boot Barn Holdings
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Boot Barn Holdings.
What Are Growth Metrics Telling Us About The Low P/E?
There's an inherent assumption that a company should underperform the market for P/E ratios like Boot Barn Holdings' to be considered reasonable.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 13%. Even so, admirably EPS has lifted 328% in aggregate from three years ago, notwithstanding the last 12 months. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 6.2% per year over the next three years. Meanwhile, the rest of the market is forecast to expand by 13% each year, which is noticeably more attractive.
With this information, we can see why Boot Barn Holdings is trading at a P/E lower than the market. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.
The Key Takeaway
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.
As we suspected, our examination of Boot Barn Holdings' analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.
The company's balance sheet is another key area for risk analysis. Our free balance sheet analysis for Boot Barn Holdings with six simple checks will allow you to discover any risks that could be an issue.
If you're unsure about the strength of Boot Barn Holdings' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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.
Boot Barn Holdings, Inc.s(紐約證券交易所代碼:BOOT)市盈率(或 “市盈率”)爲14.4倍,與美國市場相比,目前可能看起來像買入。在美國,約有一半公司的市盈率高於17倍,甚至市盈率超過33倍也很常見。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率有限。
最近對Boot Barn Holdings來說並不是有利的,因爲其收益的下降速度比大多數其他公司快。看來許多人預計慘淡的盈利表現將持續下去,這抑制了市盈率。如果你仍然相信該業務,你寧願公司不流失收益。如果不是,那麼現有股東可能很難對股價的未來走向感到興奮。
查看我們對 Boot Barn Holdings 的最新分析
如果你想了解分析師對未來的預測,你應該查看我們關於Boot Barn Holdings的免費報告。
關於低市盈率,增長指標告訴我們什麼?
人們固有的假設是,如果像Boot Barn Holdings這樣的市盈率被認爲是合理的,公司的表現應該低於市場。