Oppein Home Group Inc.'s (SHSE:603833) price-to-earnings (or "P/E") ratio of 14.1x might make it look like a strong buy right now compared to the market in China, where around half of the companies have P/E ratios above 31x and even P/E's above 57x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
Recent times have been pleasing for Oppein Home Group as its earnings have risen in spite of the market's earnings going into reverse. One possibility is that the P/E is low because investors think the company's earnings are going to fall away like everyone else's soon. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
Want the full picture on analyst estimates for the company? Then our free report on Oppein Home Group will help you uncover what's on the horizon.
How Is Oppein Home Group's Growth Trending?
In order to justify its P/E ratio, Oppein Home Group would need to produce anemic growth that's substantially trailing the market.
Retrospectively, the last year delivered an exceptional 18% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 53% in total over the last three years. So we can start by confirming that the company has done a great job of growing earnings over that time.
Looking ahead now, EPS is anticipated to climb by 12% during the coming year according to the analysts following the company. Meanwhile, the rest of the market is forecast to expand by 41%, which is noticeably more attractive.
In light of this, it's understandable that Oppein Home Group's P/E sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Final Word
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.
As we suspected, our examination of Oppein Home Group's analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. It's hard to see the share price rising strongly in the near future under these circumstances.
And what about other risks? Every company has them, and we've spotted 1 warning sign for Oppein Home Group you should know about.
If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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Oppein Home Group Inc. 's(SHSE: 603833)市盈率(或 “市盈率”)爲14.1倍,與中國市場相比,目前看上去像是一個強勁的買盤,中國約有一半的公司的市盈率超過31倍,甚至市盈率高於57倍也很常見。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅下降是否有合理的基礎。
最近一段時間令Oppein Home Group感到高興,因爲儘管市場收益出現逆轉,但其收益卻有所增加。一種可能性是市盈率很低,因爲投資者認爲該公司的收益將像其他所有人一樣很快下降。如果你喜歡這家公司,你希望情況並非如此,這樣你就有可能在它失寵的時候買入一些股票。
想全面了解分析師對公司的估計嗎?然後,我們關於Oppein Home Group的免費報告將幫助您發現即將發生的事情。