Kinetic Development Group Limited (HKG:1277) shares have had a really impressive month, gaining 26% after a shaky period beforehand. Longer-term shareholders would be thankful for the recovery in the share price since it's now virtually flat for the year after the recent bounce.
Although its price has surged higher, Kinetic Development Group's price-to-earnings (or "P/E") ratio of 2.4x might still make it look like a strong buy right now compared to the market in Hong Kong, where around half of the companies have P/E ratios above 10x and even P/E's above 19x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
For instance, Kinetic Development Group's receding earnings in recent times would have to be some food for thought. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
Check out our latest analysis for Kinetic Development Group
Although there are no analyst estimates available for Kinetic Development Group, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
Is There Any Growth For Kinetic Development Group?
Kinetic Development Group's P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 36%. Even so, admirably EPS has lifted 133% in aggregate from three years ago, notwithstanding the last 12 months. Although it's been a bumpy ride, it's still fair to say the earnings growth recently has been more than adequate for the company.
Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 23% shows it's noticeably more attractive on an annualised basis.
In light of this, it's peculiar that Kinetic Development Group's P/E sits below the majority of other companies. Apparently some shareholders believe the recent performance has exceeded its limits and have been accepting significantly lower selling prices.
What We Can Learn From Kinetic Development Group's P/E?
Kinetic Development Group's recent share price jump still sees its P/E sitting firmly flat on the ground. 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.
Our examination of Kinetic Development Group revealed its three-year earnings trends aren't contributing to its P/E anywhere near as much as we would have predicted, given they look better than current market expectations. When we see strong earnings with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. It appears many are indeed anticipating earnings instability, because the persistence of these recent medium-term conditions would normally provide a boost to the share price.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Kinetic Development Group, 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 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.
Kinetic Development Group Limited(HKG:1277)的股票經歷了非常令人印象深刻的一個月,在經歷了動盪時期之後上漲了26%。長期股東會感謝股價的回升,因爲在最近的反彈之後的一年中,股價幾乎持平。
儘管其價格飆升,但與香港市場相比,Kinetic Development Group的2.4倍市盈率(或 “市盈率”)仍可能使其目前看起來像是一個強勁的買盤。在香港市場,大約有一半的公司的市盈率超過10倍,甚至市盈率也高於19倍也很常見。儘管如此,我們需要進行更深入的研究,以確定大幅降低市盈率是否有合理的基礎。
例如,Kinetic Development Group最近收益的下降必須值得深思。許多人可能預計令人失望的收益表現會持續或加速,這抑制了市盈率。如果你喜歡這家公司,你會希望情況並非如此,這樣你就有可能在股票失寵的時候買入一些股票。
查看我們對 Kinetic 開發組的最新分析
儘管沒有分析師對Kinetic Development Group的估計,但請看一下這個數據豐富的免費可視化,看看該公司的收益、收入和現金流是如何積累的。
Kinetic 開發集團有增長嗎?
Kinetic Development Group的市盈率對於預計增長非常不佳甚至收益下降的公司來說是典型的,更重要的是,其表現要比市場差得多。
有鑑於此,奇怪的是,Kinetic Development Group的市盈率低於大多數其他公司。顯然,一些股東認爲最近的表現已經超出了極限,並且一直在接受大幅降低的銷售價格。
我們可以從動能開發集團的市盈率中學到什麼?
Kinetic Development Group最近的股價上漲仍使其市盈率保持穩定。通常,我們傾向於將市盈率的使用限制在確定市場對公司整體健康狀況的看法上。
我們對Kinetic Development Group的審查顯示,鑑於這些趨勢看起來好於當前的市場預期,其三年收益趨勢對其市盈率的貢獻沒有我們預期的那麼大。當我們看到強勁的收益和快於市場的增長時,我們認爲潛在風險可能會給市盈率帶來巨大壓力。看來許多人確實在預期收益不穩定,因爲最近的這些中期條件的持續存在通常會提振股價。
始終有必要考慮永遠存在的投資風險幽靈。我們已經向Kinetic Development Group發現了一個警告信號,理解應該成爲您的投資過程的一部分。