Unfortunately for some shareholders, the Wan Kei Group Holdings Limited (HKG:1718) share price has dived 29% in the last thirty days, prolonging recent pain. For any long-term shareholders, the last month ends a year to forget by locking in a 95% share price decline.
In spite of the heavy fall in price, it's still not a stretch to say that Wan Kei Group Holdings' price-to-sales (or "P/S") ratio of 0.1x right now seems quite "middle-of-the-road" compared to the Construction industry in Hong Kong, where the median P/S ratio is around 0.2x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
What Does Wan Kei Group Holdings' Recent Performance Look Like?
For instance, Wan Kei Group Holdings' receding revenue in recent times would have to be some food for thought. One possibility is that the P/S is moderate because investors think the company might still do enough to be in line with the broader industry in the near future. If you like the company, you'd at least be hoping this is the case so that you could potentially pick up some stock while it's not quite in favour.
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 Wan Kei Group Holdings' earnings, revenue and cash flow.
How Is Wan Kei Group Holdings' Revenue Growth Trending?
The only time you'd be comfortable seeing a P/S like Wan Kei Group Holdings' is when the company's growth is tracking the industry closely.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 8.5%. The last three years don't look nice either as the company has shrunk revenue by 1.7% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 10% shows it's an unpleasant look.
With this in mind, we find it worrying that Wan Kei Group Holdings' P/S exceeds that of its industry peers. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
The Final Word
Following Wan Kei Group Holdings' share price tumble, its P/S is just clinging on to the industry median P/S. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
We find it unexpected that Wan Kei Group Holdings trades at a P/S ratio that is comparable to the rest of the industry, despite experiencing declining revenues during the medium-term, while the industry as a whole is expected 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. Unless the recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
Having said that, be aware Wan Kei Group Holdings is showing 2 warning signs in our investment analysis, and 1 of those is concerning.
If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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.
一部の株主にとっては残念なことですが、Wan Kei Group Holdings Limited(HKG:1718)の株価は過去30日間で29%下落し、最近の苦痛を延長しています。長期保有株主にとって、先月は株価が95%下落する年を締めくくります。
価格が大幅に下落しているにもかかわらず、Wan Kei Group Holdingsの価格売上高倍率(または「P/S」)0.1倍は現在、香港の建設業界の中で中途半端に見えるかもしれません。ここで中央値P/S比率は約0.2倍です。これが驚きをもたらすことはないかもしれませんが、P/S比率が正当化されていない場合、投資家は潜在的な機会を逃すか、迫り来る失望を無視している可能性があります。
Wan Kei Group Holdingsの最近のパフォーマンスはどのようになっていますか?
たとえば、Wan Kei Group Holdingsの売上高減少が最近続いていることは考えるべき点です。一つの可能性は、投資家が企業が今後広範囲な業界と合致するようにまだ十分なことを行うと思っているため、P/S比率が適度であるということです。企業が気に入っている場合、少なくともこれが事実であることを期待するでしょう。これにより、好まれていないときに株を手に入れる可能性があります。
アナリストの予測はありませんが、最近のトレンドが将来の会社の状況を準備している様子は弊社のWan Kei Group Holdingsの収益、売上高、キャッシュフローに関する無料レポートをチェックすることで確認できます。
株価が下落したWan Kei Group HoldingsのP/Sは業界の中央値P/Sにはぎつねをするだけです。株式を買うかどうかを決める重要な要素ではありませんが、売上高の期待に対する能力のある指標です。
Wan Kei Group Holdingsが中期的に売上高が減少している一方、業界全体が成長を予測している中、同社が業界と比較してP/S比率で取引していることは予想外です。業界予測が増加している状況で売上高が逆行すると、将来的な株価の下落が予想され、P/S比率も低下することは合理的です。最近の中期的な状況が著しく改善しない限り、投資家は株価を公正な価値として受け入れるのは難しいでしょう。
ただし、投資分析でWan Kei Group Holdingsは2つの警告サインを示しており、そのうち1つは懸念されています。
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。