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Dalian Demaishi Precision Technology Co., Ltd. may have overhyped shares

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TLDR:

  • Dalian Demaishi Precision Technology Co., Ltd.’s (SZSE:301007) P/E ratio is 37.9x, higher than the market average.
  • The company showed impressive earnings growth last year but has a mixed track record over the longer term.

Dalian Demaishi Precision Technology Co., Ltd.’s (SZSE:301007) has a price-to-earnings (P/E) ratio of 37.9x, which is higher than the market average in China. This could indicate that the stock is overvalued, especially considering that the company’s earnings growth over the longer term is not as strong compared to its recent performance. While the company showed an impressive 18% growth in earnings per share last year, its three-year EPS growth has been relatively non-existent.

Investors seem to be optimistic about the company’s future performance, resulting in a high P/E ratio. However, with the market expected to grow by 41% over the next year while the company’s earnings have been declining, there is concern that the stock may be overvalued. It’s important to consider the investment risk and potential for future disappointment if the P/E ratio falls to more reasonable levels.

Ultimately, it is crucial for investors to conduct a thorough analysis of Dalian Demaishi Precision Technology before making any investment decisions. The high P/E ratio may not be entirely justified based on the company’s historical and projected earnings performance.

Source: Simply Wall St

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