The semiconductor industry is part of the IT sector

At first, the P / E dynamics was inversely proportional to the expansion of shares: income grew together with capitalization, so the P / E worth fell towards the background of rising shares in 2017-2018 – it is a signal of a powerful trade, when the rise in shares is justified by financial indicators. We remind you that within the Worth-to-Earnings multiplier, the numerator is capitalization, and the denominator is the web revenue, and the decrease this worth is, the higher for the businesses / sector. And when the P / E declined on rallying shares, it indicated that the denominator (revenue) was rising sooner than the numerator (inventory worth).

Nevertheless, the state of affairs is completely different now. After the inventory fell in December, the P / E fell accordingly. Nevertheless, now the expansion of two values ​​(the numerator and the denominator) is immediately proportional – following the rise within the inventory worth, the P / E additionally grows. From the previous chart, we see that the revenue will not be rising; nevertheless, P / E dynamics are barely completely different from EPS.

So it seems that when it comes to P / E, the semiconductor trade is now cheaper than final yr, and there’s no actual revenue development.

What, the truth is, will be seen from the desk beneath:

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