Further Upside For Adairs Limited (ASX:ADH) Shares Could Introduce Price Risks After 37% Bounce
Adairs Limited (ASX:ADH) shares have had a really impressive month, gaining 37% after a shaky period beforehand. Looking back a bit further, it’s encouraging to see the stock is up 80% in the last year.
In spite of the firm bounce in price, given about half the companies in Australia have price-to-earnings ratios (or “P/E’s”) above 20x, you may still consider Adairs as an attractive investment with its 13.6x P/E ratio. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the reduced P/E.
While the market has experienced earnings growth lately, Adairs’ earnings have gone into reverse gear, which is not great. It seems that many are expecting the dour earnings performance to persist,…
