Stock Analysis

Fewer Investors Than Expected Jumping On HUYA Inc. (NYSE:HUYA)

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With a price-to-earnings (or "P/E") ratio of 12.5x HUYA Inc. (NYSE:HUYA) may be sending bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios greater than 18x and even P/E's higher than 36x are not unusual. 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, HUYA's earnings have gone into reverse gear, which is not great. It seems that many are expecting the dour earnings performance to persist, which has repressed the P/E. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.

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NYSE:HUYA Price Based on Past Earnings April 4th 2022
Want the full picture on analyst estimates for the company? Then our free report on HUYA will help you uncover what's on the horizon.

How Is HUYA's Growth Trending?

HUYA'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.

Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 37%. At least EPS has managed not to go completely backwards from three years ago in aggregate, thanks to the earlier period of growth. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.

The Final Word

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.

Don't forget that there may be other risks. For instance, we've identified 3 warning signs for HUYA (1 is a bit concerning) you should be aware of.

It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a P/E ratio below 20x).

What are the risks and opportunities for HUYA?

HUYA Inc., through its subsidiaries, operates game live streaming platforms in the People’s Republic of China.

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  • Earnings are forecast to grow 88.58% per year


  • Volatile share price over the past 3 months

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