Helix Energy Solutions Group, Inc.’s (NYSE:HLX) price-to-earnings (or “P/E”) ratio of 15.7x might make it look like a buy right now compared to the market in the United States, where around half of the companies have P/E ratios above 19x and even P/E’s above 37x are quite common. However, the P/E might be low for a reason and it requires further investigation to determine if it’s justified.
Helix Energy Solutions Group’s negative earnings growth of late has neither been better nor worse than most other companies. It might be that many expect the company’s earnings performance to degrade further, which has repressed the P/E. If you still like the company, you’d want its earnings trajectory to turn around before making any decisions. At the very least, you’d be hoping that earnings don’t fall off a cliff if your plan is to pick up some stock while it’s out of favour.
If you’d like to see what analysts are forecasting going forward, you should check out our free report on Helix Energy Solutions Group.
How Is Helix Energy Solutions Group’s Growth Trending?
Helix Energy Solutions Group’s P/E ratio would be typical for a company that’s only expected to deliver limited growth, and importantly, perform worse than the market.
Retrospectively, the last year delivered a frustrating 2.8% decrease to the company’s bottom line. At least EPS has managed not to go completely backwards from three years ago in aggregate, thanks to the earlier period of growth. So it appears to us that the company has had a mixed result in terms of growing earnings over that time.
The Bottom Line On Helix Energy Solutions Group’s P/E
Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
And what about other risks? Every company has them, and we’ve spotted 2 warning signs for Helix Energy Solutions Group you should know about.
You might be able to find a better investment than Helix Energy Solutions Group. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a P/E below 20x (but have proven they can grow earnings).
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.