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The “right” PE ratio is influenced not just by current earnings, but also by expectations for growth and the perceived riskiness of the business. Growing companies or those with strong competitive advantages tend to justify higher multiples, while riskier or slower-growing businesses generally trade at lower PE ratios.

Restaurant Brands International currently trades at a PE ratio of 25.5x. For perspective, this is above the broader hospitality industry average of 21.3x and slightly higher than the average among its closest peers, which stands at 24.3x.

Simply Wall St’s proprietary Fair Ratio for Restaurant Brands International is 29.2x. This figure factors in far more than profitable peers or sector averages, incorporating growth prospects, profit margins, risks, and the company’s market cap. As a result, the Fair Ratio provides a more holistic, tailored benchmark of what constitutes a reasonable multiple for the stock today.

Comparing the current PE (25.5x) to the Fair Ratio (29.2x), Restaurant Brands International stock is trading below its unique fair value by this metric, indicating it appears undervalued against its expected growth and risk profile.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1438 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple yet powerful way for investors to describe their story and reasoning behind the numbers they use for fair value, as well as their expectations for Restaurant Brands International’s growth, profits, and margins.

A Narrative links the company’s story and strategic outlook directly to a financial forecast, and automatically converts those inputs into a fair value that you can compare to today’s stock price. Narratives are easy to create and access, and millions of investors are already using them on the Simply Wall St Community page as a means to share perspectives and track real-time updates.

This approach helps you decide when to buy or sell, since Narratives let you see instantly how your fair value changes as new earnings, news, or forecasts emerge. For example, some investors expect substantial growth from expansion in China and set bullish price targets as high as $93.0, while others are more cautious due to industry risks and price in a low case target of $60.0. Narratives make investing dynamic, more personal, and truly focused on what matters most to you as new information arrives.

Do you think there’s more to the story for Restaurant Brands International? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Companies discussed in this article include QSR.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Growth expectations and risks play a crucial role in what the “right” PE ratio should be. Investors generally assign higher PE ratios to companies expected to grow earnings quickly, while higher risk can lower the fair multiple. For context, Qualys currently trades at a PE of 26.7x, which is below the industry average of 31.8x and far beneath the peer average of 57.4x.

To add more nuance, Simply Wall St introduces the concept of a Fair Ratio, which is calculated as 25.4x for Qualys. The Fair Ratio incorporates factors like Qualys’ earnings growth, industry profile, profit margins, market capitalization, and company-specific risks, giving a more holistic view of what the multiple ought to be. This proprietary approach offers a more balanced benchmark than simply comparing with peers or industry averages, which may not reflect a company’s unique attributes and risks.

Since Qualys’ actual PE of 26.7x is just above its Fair Ratio of 25.4x, the shares appear to be valued about right based on earnings, factoring in its growth outlook and profitability.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1438 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personal investment story. It captures your unique perspective on a company by connecting the story you believe in with specific numbers such as fair value, future revenue, earnings, and margins.

Narratives link the qualitative drivers behind a company’s business, such as new products, partnerships, or risks, to a concrete financial forecast and translate those estimates into an actionable fair value. They help you make smarter decisions by letting you see instantly how your point of view stacks up against the current share price.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy and dynamic tool. Each time news or earnings break, Narratives are updated automatically so your investment view always stays relevant. For example, some Qualys Narratives might assume aggressive expansion and set a fair value at $160, while others take a more cautious stance, coming in at $97. This helps you clearly identify whether now is the right time to make investment decisions based on your own convictions.

Do you think there’s more to the story for Qualys? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Companies discussed in this article include QLYS.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

For profitable companies like Kaspi.kz, the Price-to-Earnings (PE) ratio is often the most reliable valuation measure. The PE ratio captures how much investors are willing to pay for each dollar of company earnings, making it particularly useful for firms with steady profit generation. A “normal” or “fair” PE ratio accounts not only for expected growth rates but also for risk factors such as market volatility, industry dynamics, and profitability.

Kaspi.kz currently trades at a PE ratio of 6.87x. This is substantially below both the Consumer Finance industry average of 9.80x and the peer group average of 27.69x. This indicates the market values Kaspi.kz’s current earnings more conservatively than its competitors. However, such comparisons only provide a partial view, as they overlook company-specific growth prospects and risks.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio, in this case 17.44x, is calculated to reflect factors unique to Kaspi.kz, including its earnings growth, industry position, profit margins, market capitalization, and specific risk profile. Unlike basic peer or industry benchmarks, it adjusts for what matters most to long-term investors.

Comparing the Fair Ratio of 17.44x to Kaspi.kz’s actual PE of 6.87x, the stock appears meaningfully undervalued by this measure, reinforcing the findings of earlier valuation models.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1438 companies where insiders are betting big on explosive growth.

Earlier, we mentioned that there is an even better way to understand valuation, so let us introduce Narratives. Narratives are your opportunity to attach a story—your perspective of Kaspi.kz’s future—to the numbers you see, including your own fair value, revenue, earnings, and margin assumptions. Rather than relying solely on ratios and models, Narratives connect the company’s journey to a tailored financial forecast and a fair value that accounts for both qualitative and quantitative information.

On Simply Wall St’s Community page, used by millions of investors, anyone can easily build and update their own Narrative for Kaspi.kz. This takes advantage of live data and input from other users. Narratives help clarify investment decisions by comparing your fair value to the latest market price, updating automatically as new news or earnings emerge so your viewpoint stays relevant and informed.

For example, Kaspi.kz’s current analyst price targets span from KZT86.54 on the bearish side to KZT130.73 on the bullish end. Each target reflects a different Narrative based on expectations for regulatory risks, revenue growth, and margins, and your own assumptions could land anywhere in between.

Do you think there’s more to the story for Kaspi.kz? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Companies discussed in this article include KSPI.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com