To the annoyance of some shareholders, K. H. Group Holdings Limited (HKG:1557) shares are down a considerable 43% in the last month, which continues a horrid run for the company. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 26% in that time.
Even after such a large drop in price, it's still not a stretch to say that K. H. Group Holdings' price-to-sales (or "P/S") ratio of 0.6x right now seems quite "middle-of-the-road" compared to the Construction industry in Hong Kong, where the median P/S ratio is around 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.
SEHK:1557 Price to Sales Ratio vs Industry July 21st 2024
How Has K. H. Group Holdings Performed Recently?
As an illustration, revenue has deteriorated at K. H. Group 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.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on K. H. Group Holdings will help you shine a light on its historical performance.
How Is K. H. Group Holdings' Revenue Growth Trending?
K. H. Group Holdings' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 29%. This means it has also seen a slide in revenue over the longer-term as revenue is down 81% in total over the last three years. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
Comparing that to the industry, which is predicted to deliver 10% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.
In light of this, it's somewhat alarming that K. H. Group Holdings' P/S sits in line with the majority of other companies. Apparently many investors in the company are way less bearish than recent times would indicate and aren't willing to let go of their stock right now. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh on the share price eventually.
The Final Word
K. H. Group Holdings' plummeting stock price has brought its P/S back to a similar region as the rest of the industry. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.
Our look at K. H. Group Holdings revealed its shrinking revenues over the medium-term haven't impacted the P/S as much as we anticipated, given the industry is set to grow. When we see revenue heading backwards in the context of growing industry forecasts, it'd make sense to expect a possible share price decline on the horizon, sending the moderate P/S lower. If recent medium-term revenue trends continue, it will place shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
There are also other vital risk factors to consider and we've discovered 4 warning signs for K. H. Group Holdings (2 are significant!) that you should be aware of before investing here.
Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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
株主の一部の人々の不快感を買って、HKG:1557、万. H. Group Holdings Limitedの株価は過去1か月間で43%も下落し、同社にとって大変厳しい時期が続いています。過去30日間の下落は株主にとって厳しい年を締めくくり、その期間中の株価は26%下落しました。
このような大幅な株価下落の後でも、香港の建設業界の中央値のP/S比率が約0.3xであるのに対し、万. H. Group HoldingsのP/S比率が今0.6xであることは、中途半端と言えるかもしれません。ただし、説明なしにP/Sを単に無視することは賢くありません。投資家が明確な機会または高価なミスを無視している可能性があります。
これを踏まえると、k. H. Group HoldingsのP / S比率が他の多くの企業と同じレベルにあることは、いくぶん懸念すべきことです。明らかに、同社の多くの投資家は最近のような弱気ではなく、現在その株式を手放すつもりはありません。近年の収益トレンドの継続により、かなりの期間が経過した後に、株価に影響を及ぼす可能性があります。
最終的な言葉
k. H.グループホールディングスの株価の急落により、同社のP / S比率は業界全体のこれまでの水準に戻りました。通常、私たちの偏見は、P / S比率の使用を制限して、市場が企業全体の健全性についてどう考えているかを把握することです。
k. H.グループホールディングスの調査から、中期的な売上高の減少が業界の成長見通しに対してあまり影響を与えていないことがわかりました。収益が成長する業界予測の文脈で後退するのを見ると、穏やかなP / Sが低下し、将来的には株価が下落する可能性があることが理解できます。最近の中期的な収益傾向が続く場合、株主の投資はリスクにさらされ、潜在的な投資家は不必要なプレミアムを支払う危険にさらされることになります。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。