NYSE:YGE Past Future Earnings Jan 16th 18
The battle for competitive advantage has led businesses to adopt new the cutting-edge technology, or risk being left behind. Many technologies are now coming into their own as their power and speed increase and the cost of delivering them goes down. And some are pursing growth through various strategies including new M&A, collaboration and alliances, as well as cost reduction and organic growth. Over the past year, the industry saw growth in the teens, beating the US market growth of 10.81%. Yingli Green Energy Holding lags the pack with its earnings falling by more than half over the past year, which indicates the company will be growing at a slower pace than its tech hardware peers. However, the future seems brighter, as analysts expect an industry-beating growth rate of 66.39% in the upcoming year.
Is Yingli Green Energy Holding and the sector relatively cheap?
The tech hardware sector’s PE is currently hovering around 20x, in-line with the US stock market PE of 20x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. However, the industry returned a lower 8.36% compared to the market’s 10.46%, potentially indicative of past headwinds. Since Yingli Green Energy Holding’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Yingli Green Energy Holding’s value is to assume the stock should be relatively in-line with its industry.
What this means for you:
Are you a shareholder? Yingli Green Energy Holding’s industry-beating future is a positive for shareholders, indicating they’ve backed a fast-growing horse. If you’re bullish on the stock and well-diversified by industry, you may decide to hold onto Yingli Green Energy Holding as part of your portfolio. However, if you’re relatively concentrated in tech, you may want to value Yingli Green Energy Holding based on its cash flows to determine if it is overpriced based on its current growth outlook.
Are you a potential investor? If Yingli Green Energy Holding has been on your watchlist for a while, now may be the time to enter into the stock, if you like its growth prospects and are not highly concentrated in the tech industry. Before you make a decision on the stock, take a look at Yingli Green Energy Holding’s cash flows and assess whether the stock is trading at a fair price.
For a deeper dive into Yingli Green Energy Holding’s stock, take a look at the company’s latest free analysis report to find out more on its financial health and other fundamentals. Interested in other tech stocks instead? Use our free playform to see my list of over 1000 other tech companies trading on the market.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.