MP Materials Corp. (NYSE:MP) shareholders won't be pleased to see that the share price has had a very rough month, dropping 27% and undoing the prior period's positive performance. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 40% in that time.
Although its price has dipped substantially, given around half the companies in the United States' Metals and Mining industry have price-to-sales ratios (or "P/S") below 1.3x, you may still consider MP Materials as a stock to avoid entirely with its 10.7x P/S ratio. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.
NYSE:MP Price to Sales Ratio vs Industry June 19th 2024
How MP Materials Has Been Performing
While the industry has experienced revenue growth lately, MP Materials' revenue has gone into reverse gear, which is not great. Perhaps the market is expecting the poor revenue to reverse, justifying it's current high P/S.. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Keen to find out how analysts think MP Materials' future stacks up against the industry? In that case, our free report is a great place to start.
Do Revenue Forecasts Match The High P/S Ratio?
In order to justify its P/S ratio, MP Materials would need to produce outstanding growth that's well in excess of the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 55%. Regardless, revenue has managed to lift by a handy 19% in aggregate from three years ago, thanks to the earlier period of growth. So we can start by confirming that the company has generally done a good job of growing revenue over that time, even though it had some hiccups along the way.
Turning to the outlook, the next three years should generate growth of 58% per annum as estimated by the ten analysts watching the company. That's shaping up to be materially higher than the 34% per year growth forecast for the broader industry.
In light of this, it's understandable that MP Materials' P/S sits above the majority of other companies. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From MP Materials' P/S?
Even after such a strong price drop, MP Materials' P/S still exceeds the industry median significantly. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
Our look into MP Materials shows that its P/S ratio remains high on the merit of its strong future revenues. At this stage investors feel the potential for a deterioration in revenues is quite remote, justifying the elevated P/S ratio. Unless the analysts have really missed the mark, these strong revenue forecasts should keep the share price buoyant.
We don't want to rain on the parade too much, but we did also find 3 warning signs for MP Materials (1 is potentially serious!) that you need to be mindful of.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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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.
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MP Materials Corp.(纽约证券交易所代码:MP)的股东们一定不会高兴地看到,该公司的股价在本月经历了一次非常艰难的下跌,跌幅达27%,使前期的积极表现付之东流。 过去30天的下跌结束了股东艰难的一年,当时股价下跌了40%。
尽管其价格已大幅下跌,但鉴于美国金属和采矿业中约有一半公司的市销比(或 “市销率”)低于1.3倍,您仍然可以将MP Materials视为完全避开的股票,其市销率为10.7倍。但是,市销率可能很高是有原因的,需要进一步调查以确定其是否合理。
纽约证券交易所:MP 与行业的股价销售比率 2024 年 6 月 19 日
MP Materials的表现如何
尽管该行业最近经历了收入增长,但MP Materials的收入却倒退了,这并不好。也许市场预计收入不佳的情况将逆转,这证明了目前的高市销率是合理的。你真的希望如此,否则你会无缘无故地付出相当大的代价。
想了解分析师如何看待MP Materials的未来与该行业的对立吗?在这种情况下,我们的免费报告是一个很好的起点。
收入预测与高市销率相匹配吗?
为了证明其市销率是合理的,MP Materials需要实现远远超过该行业的出色增长。
在回顾去年的财务状况时,看到该公司的收入下降至55%左右,我们感到沮丧。无论如何,得益于较早的增长,总收入已成功地比三年前增长了19%。因此,我们可以首先确认该公司在此期间在增加收入方面总体上做得很好,尽管在此过程中遇到了一些小问题。
展望来看,根据关注该公司的十位分析师的估计,未来三年将实现每年58%的增长。这将大大高于整个行业每年34%的增长预期。
有鉴于此,可以理解MP Materials的市销率高于其他多数公司。看来大多数投资者都在期待这种强劲的未来增长,并愿意为该股支付更多费用。
我们可以从 MP Materials 的市销率中学到什么?
即使价格下跌如此强劲,MP Materials的市销率仍大大超过行业中位数。仅使用市销率来确定是否应该出售股票是不明智的,但它可以作为公司未来前景的实用指南。
我们对MP Materials的调查表明,由于其未来收入强劲,其市销率仍然很高。在现阶段,投资者认为收入恶化的可能性微乎其微,这证明市销售率上升是合理的。除非分析师真的没有达到目标,否则这些强劲的收入预测应该会保持股价的上涨。
我们不想在游行队伍中下太多雨,但我们也发现了 3 个 MP 材料的警告标志(1 个可能很严重!)这是你需要注意的。
如果你喜欢实力雄厚的公司盈利,那么你会想看看这份以低市盈率(但已证明可以增加收益)的有趣公司的免费名单。
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Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。
对这篇文章有反馈吗?担心内容吗?直接联系我们。或者,发送电子邮件至 editorial-team@simplywallst.com