Anuncio
Mercados españoles cerrados
  • IBEX 35

    11.074,60
    -36,70 (-0,33%)
     
  • Euro Stoxx 50

    5.083,42
    +1,68 (+0,03%)
     
  • Dólar/Euro

    1,0789
    -0,0005 (-0,04%)
     
  • Petróleo Brent

    87,45
    -0,03 (-0,03%)
     
  • Oro

    2.254,80
    +16,40 (+0,73%)
     
  • Bitcoin EUR

    65.029,50
    -315,68 (-0,48%)
     
  • CMC Crypto 200

    885,54
    0,00 (0,00%)
     
  • DAX

    18.492,49
    +15,40 (+0,08%)
     
  • FTSE 100

    7.952,62
    +20,64 (+0,26%)
     
  • S&P 500

    5.254,35
    +5,86 (+0,11%)
     
  • Dow Jones

    39.807,37
    +47,29 (+0,12%)
     
  • Nasdaq

    16.379,46
    -20,06 (-0,12%)
     
  • Petróleo WTI

    83,11
    -0,06 (-0,07%)
     
  • EUR/GBP

    0,8547
    0,0000 (0,00%)
     
  • Plata

    25,10
    +0,18 (+0,74%)
     
  • NIKKEI 225

    40.369,44
    +201,37 (+0,50%)
     

Codemasters Group Holdings Plc's (LON:CDM) Popularity With Investors Is Clear

When close to half the companies in the United Kingdom have price-to-earnings ratios (or "P/E's") below 15x, you may consider Codemasters Group Holdings Plc (LON:CDM) as a stock to avoid entirely with its 46.8x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.

Codemasters Group Holdings 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. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. If not, then existing shareholders might be a little nervous about the viability of the share price.

See our latest analysis for Codemasters Group Holdings

pe
pe

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Codemasters Group Holdings.

Is There Enough Growth For Codemasters Group Holdings?

There's an inherent assumption that a company should far outperform the market for P/E ratios like Codemasters Group Holdings' to be considered reasonable.

ANUNCIO

Taking a look back first, we see that the company grew earnings per share by an impressive 159% last year. Still, EPS has barely risen at all from three years ago in total, which is not ideal. Therefore, it's fair to say that earnings growth has been inconsistent recently for the company.

Turning to the outlook, the next three years should generate growth of 18% per annum as estimated by the ten analysts watching the company. With the market only predicted to deliver 12% per year, the company is positioned for a stronger earnings result.

With this information, we can see why Codemasters Group Holdings is trading at such a high P/E compared to the market. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

The Bottom Line On Codemasters Group Holdings' P/E

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 Codemasters Group Holdings' analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.

It is also worth noting that we have found 2 warning signs for Codemasters Group Holdings that you need to take into consideration.

If these risks are making you reconsider your opinion on Codemasters Group Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.