OrbusNeich Medical Group Holdings Limited (HKG:6929) shareholders won't be pleased to see that the share price has had a very rough month, dropping 26% and undoing the prior period's positive performance. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 62% loss during that time.
In spite of the heavy fall in price, it's still not a stretch to say that OrbusNeich Medical Group Holdings' price-to-earnings (or "P/E") ratio of 7.7x right now seems quite "middle-of-the-road" compared to the market in Hong Kong, where the median P/E ratio is around 9x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.
Recent times have been advantageous for OrbusNeich Medical Group Holdings as its earnings have been rising faster than most other companies. One possibility is that the P/E is moderate because investors think this strong earnings performance might be about to tail off. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.
SEHK:6929 Price to Earnings Ratio vs Industry July 23rd 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on OrbusNeich Medical Group Holdings.
How Is OrbusNeich Medical Group Holdings' Growth Trending?
OrbusNeich Medical Group Holdings' P/E ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the market.
If we review the last year of earnings growth, the company posted a terrific increase of 72%. The latest three year period has also seen an excellent 345% overall rise in EPS, aided by its short-term performance. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Looking ahead now, EPS is anticipated to climb by 9.2% per year during the coming three years according to the three analysts following the company. That's shaping up to be materially lower than the 15% per annum growth forecast for the broader market.
In light of this, it's curious that OrbusNeich Medical Group Holdings' P/E sits in line with the majority of other companies. It seems most investors are ignoring the fairly limited growth expectations and are willing to pay up for exposure to the stock. These shareholders may be setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.
The Final Word
Following OrbusNeich Medical Group Holdings' share price tumble, its P/E is now hanging on to the median market P/E. We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
We've established that OrbusNeich Medical Group Holdings currently trades on a higher than expected P/E since its forecast growth is lower than the wider market. When we see a weak earnings outlook with slower than market growth, we suspect the share price is at risk of declining, sending the moderate P/E lower. This places shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
Plus, you should also learn about this 1 warning sign we've spotted with OrbusNeich Medical Group Holdings.
If you're unsure about the strength of OrbusNeich Medical Group Holdings' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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OrbusNeich Medical Group Holdings Limited(HKG:6929)的股东们将不会高兴地看到,股价在上个月经历了非常艰难的时期,下跌了26%,并消除了上一个时期的积极表现。最近的下跌为股东们带来了灾难性的12个月,股东们在那段时间里遭受了62%的损失。
尽管价格大幅下跌,但可以说OrbusNeich Medical Group Holdings的市盈率(或“P/E”)目前为7.7倍,与香港市场上中位数的P/E(约为9倍)相比,似乎相当“中庸”。然而,如果没有合理的基础,投资者可能会忽视一个明显的机会或潜在的挫折。
最近的时期对OrbusNeich Medical Group Holdings来说是有利的,因为它的收益增长速度比大多数其他公司都快。一个可能是,由于投资者认为这种强劲的收益表现可能即将结束,因此市盈率是适度的。如果不是这样,那么现有股东有理由对股价未来的走势感到乐观。