The Man King Holdings Limited (HKG:2193) share price has fared very poorly over the last month, falling by a substantial 31%. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 41% in that time.
Although its price has dipped substantially, there still wouldn't be many who think Man King Holdings' price-to-sales (or "P/S") ratio of 0.2x is worth a mention when the median P/S in Hong Kong's Construction industry is similar at about 0.3x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
How Man King Holdings Has Been Performing
As an illustration, revenue has deteriorated at Man King Holdings over the last year, which is not ideal at all. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. If not, then existing shareholders may be a little nervous about the viability of the share price.
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Man King Holdings' earnings, revenue and cash flow.
Do Revenue Forecasts Match The P/S Ratio?
In order to justify its P/S ratio, Man King Holdings would need to produce growth that's similar to the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 25%. This has soured the latest three-year period, which nevertheless managed to deliver a decent 22% overall rise in revenue. Although it's been a bumpy ride, it's still fair to say the revenue growth recently has been mostly respectable for the company.
Comparing the recent medium-term revenue trends against the industry's one-year growth forecast of 11% shows it's noticeably less attractive.
In light of this, it's curious that Man King Holdings' P/S sits in line with the majority of other companies. It seems most investors are ignoring the fairly limited recent growth rates and are willing to pay up for exposure to the stock. Maintaining these prices will be difficult to achieve as a continuation of recent revenue trends is likely to weigh down the shares eventually.
What Does Man King Holdings' P/S Mean For Investors?
Man King Holdings' plummeting stock price has brought its P/S back to a similar region as the rest of the industry. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
Our examination of Man King Holdings revealed its poor three-year revenue trends aren't resulting in a lower P/S as per our expectations, given they look worse than current industry outlook. When we see weak revenue with slower than industry growth, we suspect the share price is at risk of declining, bringing the P/S back in line with expectations. Unless the recent medium-term conditions improve, it's hard to accept the current share price as fair value.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Man King Holdings, and understanding should be part of your investment process.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Man King Holdings Limited(港交所:2193)的股价在过去一个月表现非常糟糕,大幅下跌了31%。在过去的一年中,股价下跌了41%,这让股东们的处境变得更加艰难。
虽然Man King Holdings价格已经大幅下跌,然而,当香港建筑行业的中位数市销率达到约0.3倍时,价销比(P/S)低至0.2倍的Man King Holdings的状况却没有太多人关注。然而我们还是不应该无视价销比而没有任何解释,因为投资者可能会对一个独特的机会或昂贵的错误视而不见。
Man King Holdings 近期表现如何?
画风突变,Man King Holdings 营业收入在过去一年中出现了恶化的情况,这完全不是理想状态。也许许多人期望公司在未来一段时间内摆脱营收表现欠佳的困境,这使得价销比没有下降。如果没有任何进展,那么现有的股东可能会对股票的可行性有点担忧。
我们没有分析师的预测,但是您可以查看我们关于 Man King Holdings 的盈利、营收和现金流的免费报告,了解近期的趋势是如何为公司未来打造的。
有意思的是,Man King Holdings的市销率与大多数其他公司的市销率保持一致。似乎大多数投资者忽视了近期增长率相对较低的公司,并愿意支付更高的价格以获得该股票的投资机会。然而,随着近期营收趋势持续,维持这些价格将会变得越来越困难。
Man King Holdings的市销率对投资者意味着什么?
Man King Holdings的股价暴跌将其市销率带回到与行业其他公司类似的水平。通常,在确定投资决策时,我们不会过度关注价销比,尽管它确实可以揭示其他市场参与者对公司的看法。
我们对Man King Holdings进行的研究显示,尽管该公司在近三年的营收趋势表现不佳,但其市销率并未按照我们的预期下降,因为其营收表现实际上比当前行业前景更糟糕。当我们看到营收疲软并且增长速度低于行业增长时,我们认为股价有下降的风险,将影响价销比与预期相一致。除非近期中期经营状况得到改善,否则很难认为现在的股价是公道的价值。
投资风险一直存在。我们已经发现了Man King Holdings的一个警告信号,所以了解这些信号带来的理解应成为您的投资过程之一。