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Does Landmark Infrastructure Partners LP’s (NASDAQ:LMRK) PE Ratio Warrant A Sell?

Kristin Rankin

This analysis is intended to introduce important early concepts to people who are starting to invest and want to learn about the link between company’s fundamentals and stock market performance.

Landmark Infrastructure Partners LP (NASDAQ:LMRK) is trading with a trailing P/E of 19.3, which is higher than the industry average of 16.1. While this might not seem positive, it is important to understand the assumptions behind the P/E ratio before you make any investment decisions. In this article, I will deconstruct the P/E ratio and highlight what you need to be careful of when using the P/E ratio.

View our latest analysis for Landmark Infrastructure Partners

What you need to know about the P/E ratio

NasdaqGM:LMRK PE PEG Gauge September 14th 18


P/E Calculation for LMRK

Price-Earnings Ratio = Price per share ÷ Earnings per share

LMRK Price-Earnings Ratio = $13.3 ÷ $0.691 = 19.3x

The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. Our goal is to compare the stock’s P/E ratio to the average of companies that have similar attributes to LMRK, such as company lifetime and products sold. A common peer group is companies that exist in the same industry, which is what I use. At 19.3, LMRK’s P/E is higher than its industry peers (16.1). This implies that investors are overvaluing each dollar of LMRK’s earnings. This multiple is a median of profitable companies of 25 Real Estate companies in US including Sunrise Real Estate Group, Altisource Portfolio Solutions and Lai Fung Holdings. You could also say that the market is suggesting that LMRK is a stronger business than the average comparable company.

A few caveats

Before you jump to conclusions it is important to realise that there are assumptions in this analysis. The first is that our “similar companies” are actually similar to LMRK. If not, the difference in P/E might be a result of other factors. For example, if Landmark Infrastructure Partners LP is growing faster than its peers, then it would deserve a higher P/E ratio. We should also be aware that the stocks we are comparing to LMRK may not be fairly valued. So while we can reasonably surmise that it is optimistically valued relative to a peer group, it might be fairly valued, if the peer group is undervalued.

What this means for you:


  1. Future Outlook: What are well-informed industry analysts predicting for LMRK’s future growth? Take a look at our free research report of analyst consensus for LMRK’s outlook.
  2. Past Track Record: Has LMRK been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of LMRK’s historicals for more clarity.

