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.(紐約證券交易所代碼:MP)的股東們一定不會高興地看到,該公司的股價在本月經歷了一次非常艱難的下跌,跌幅達27%,使前期的積極表現付之東流。 過去30天的下跌結束了股東艱難的一年,當時股價下跌了40%。
儘管其價格已大幅下跌,但鑑於美國金屬和採礦業中約有一半公司的市銷比(或 “市銷率”)低於1.3倍,您仍然可以將MP Materials視爲完全避開的股票,其市銷率爲10.7倍。但是,市銷率可能很高是有原因的,需要進一步調查以確定其是否合理。
紐約證券交易所:MP 與行業的股價銷售比率 2024 年 6 月 19 日
MP Materials的表現如何
儘管該行業最近經歷了收入增長,但MP Materials的收入卻倒退了,這並不好。也許市場預計收入不佳的情況將逆轉,這證明了目前的高市銷率是合理的。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想了解分析師如何看待MP Materials的未來與該行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。
收入預測與高市銷率相匹配嗎?
爲了證明其市銷率是合理的,MP Materials需要實現遠遠超過該行業的出色增長。
在回顧去年的財務狀況時,看到該公司的收入下降至55%左右,我們感到沮喪。無論如何,得益於較早的增長,總收入已成功地比三年前增長了19%。因此,我們可以首先確認該公司在此期間在增加收入方面總體上做得很好,儘管在此過程中遇到了一些小問題。
展望來看,根據關注該公司的十位分析師的估計,未來三年將實現每年58%的增長。這將大大高於整個行業每年34%的增長預期。
有鑑於此,可以理解MP Materials的市銷率高於其他多數公司。看來大多數投資者都在期待這種強勁的未來增長,並願意爲該股支付更多費用。
我們可以從 MP Materials 的市銷率中學到什麼?
即使價格下跌如此強勁,MP Materials的市銷率仍大大超過行業中位數。僅使用市銷率來確定是否應該出售股票是不明智的,但它可以作爲公司未來前景的實用指南。
我們對MP Materials的調查表明,由於其未來收入強勁,其市銷率仍然很高。在現階段,投資者認爲收入惡化的可能性微乎其微,這證明市銷售率上升是合理的。除非分析師真的沒有達到目標,否則這些強勁的收入預測應該會保持股價的上漲。
我們不想在遊行隊伍中下太多雨,但我們也發現了 3 個 MP 材料的警告標誌(1 個可能很嚴重!)這是你需要注意的。
如果你喜歡實力雄厚的公司盈利,那麼你會想看看這份以低市盈率(但已證明可以增加收益)的有趣公司的免費名單。
對這篇文章有反饋嗎?對內容感到擔憂嗎?請直接聯繫我們。或者,也可以發送電子郵件至編輯團隊 (at) simplywallst.com。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
對這篇文章有反饋嗎?擔心內容嗎?直接聯繫我們。或者,發送電子郵件至 editorial-team@simplywallst.com