¿Cuáles son los indicadores de alta calidad de los beneficios? Análisis de los beneficios declaradosEl término calidad de los beneficios suele referirse al grado de conservadurismo de los beneficios declarados por una empresa. Los indicadores de (…)
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Análisis de Estados Financieros | Análisis de RatiosAnálisis de Estados FinancierosEsta presentación proporciona información sobre los estados financieros y el análisis de ratios, e incluye las siguientes secciones:
Valoración de empresas | Valoración de compañías | Valoración de empresasAnálisis de empresas, Análisis de compañías | Análisis de empresasEsta presentación profundiza en la valoración y el análisis de empresas e incluye las siguientes secciones:
Comparar el P/E ratio con: Ratio PEG | Valor de Mercado Agregado | Beneficio Antes de Intereses e Impuestos | Beneficio antes de Intereses, Impuestos, Depreciaciones y Amortizaciones | Margen Económico | Rentabilidad sobre Recursos Propios | TSR | Método PRVit
Forward p/e meaning
The price-to-earnings ratio, or P/E, is probably the most popular and widely used valuation indicator in the markets. However, it is important to understand its advantages and limitations, as well as the criteria to take into account when using it correctly and getting the most out of it.
This ratio has little value when analyzed in isolation; in general, it is best to compare a company’s valuation with its own historical valuation over time, the valuation of comparable firms in the same sector, or the valuation of the market in general, taking for example an index such as the S&P 500.
Here it is important to keep a few key issues in mind. The phrase “don’t compare apples and pears” has been used ad nauseam in economics and finance, but it is still smart advice when it comes to the proper use of price-to-earnings ratios.
The point is that comparisons are often inaccurate, and it is important to keep the differences in mind. A key aspect to consider is growth: the higher the expected growth rate in the company’s earnings, the higher the valuation the asset deserves. If earnings are growing faster, it is justified to pay a higher price for those earnings and vice versa.
The calculation of the PE Ratio is basic to the fundamental analysis of a stock and marks the amount you pay for each future dollar. Therefore, a high PE Ratio implies that you are paying more for future earnings, while a low one indicates the opposite, although this is not always positive and in this blog post we will explain why.
This directs us to review Apple’s PE, which currently stands at $25.68, meaning that for every $25 you invest in its stock you receive $1 of Apple’s reported earnings.
The PE Ratio tells us how much we receive for holding a stock that reports earnings, considering the effect these have on the price and the way they are distributed to shareholders.
Accordingly, you check the PE Ratio and notice that it is 13.97. This means that for every $14 you invest in Intel you can expect one unit of profit, which represents stability for the future of Intel and its stock.
P/e ratio interpretation
If the above is clear, we could mention certain errors that the P/E presents. In principle, the P/E only considers historical data, so it is not such a good indicator when we want to forecast the future of a company; to solve this problem the Projected P/E (Forward P/E) is born, in which future profits are projected and compared with the price of the asset today:
Again, a drawback is born in relation to the P/E ratio and especially in these times of excessive economic support from central banks. Let us imagine that, thanks to the large injection of liquidity and very low financing costs, companies can access a large amount of cheap debt.
As a result of this debt, it is very likely that the company’s margins will increase, reflecting a higher profit, but is it really relevant to consider these higher margins when comparing them to my price? Probably not, because when these incentives are ended, margins will return to previous levels and the profits that were once bulky will now reflect the true situation of the company; to try to avoid these errors is that the Price to Sales arises, which tells us how long it will take to recover the price invested in the share, from sales and no longer from profits. In this way we no longer take into account the fictitiously inflated margins that could be deflated in the future. WARNING: if we want to use this new ratio or another ratio in our analysis to compare two or more companies, we should make sure to compare the same ratio between them, i.e. Price/Earnings with Price/Earnings and Price to Sales with Price to Sales.