K. H. Group Holdings Limited (HKG:1557) shareholders won't be pleased to see that the share price has had a very rough month, dropping 32% and undoing the prior period's positive performance. Still, a bad month hasn't completely ruined the past year with the stock gaining 47%, which is great even in a bull market.
In spite of the heavy fall in price, you could still be forgiven for thinking K. H. Group Holdings is a stock not worth researching with a price-to-sales ratios (or "P/S") of 1.3x, considering almost half the companies in Hong Kong's Construction industry have P/S ratios below 0.3x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/S.
What Does K. H. Group Holdings' P/S Mean For Shareholders?
For instance, K. H. Group Holdings' receding revenue in recent times would have to be some food for thought. It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/S from collapsing. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
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 K. H. Group Holdings' earnings, revenue and cash flow.
How Is K. H. Group Holdings' Revenue Growth Trending?
K. H. Group Holdings' P/S ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the industry.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 61%. The last three years don't look nice either as the company has shrunk revenue by 71% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Comparing that to the industry, which is predicted to deliver 13% 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 alarming that K. H. Group Holdings' P/S sits above the majority of other companies. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. There's a very 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 Key Takeaway
There's still some elevation in K. H. Group Holdings' P/S, even if the same can't be said for its share price recently. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
Our examination of K. H. Group Holdings revealed its shrinking revenue over the medium-term isn't resulting in a P/S as low as we expected, given the industry is set to grow. With a revenue decline on investors' minds, the likelihood of a souring sentiment is quite high which could send the P/S back in line with what we'd expect. If recent medium-term revenue trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Plus, you should also learn about these 5 warning signs we've spotted with K. H. Group Holdings (including 3 which are concerning).
If you're unsure about the strength of K. H. Group Holdings' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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.
K.H. Group Holdings Limited(HKG: 1557)股东不会高兴地看到股价经历了一个非常艰难的月份,下跌了32%,抵消了前一时期的积极表现。尽管如此,糟糕的月份并没有完全毁掉过去的一年,该股上涨了47%,即使在牛市中也是不错的。
尽管价格大幅下跌,但考虑到香港建筑业中将近一半的公司的市销率低于0.3倍,你仍然认为K.H. Group Holdings是一只不值得研究的股票,其市销率(或 “P/S”)为1.3倍,你仍然可以原谅你。但是,我们需要更深入地挖掘以确定市销率上升是否有合理的基础。
K.H. 集团控股的市销率对股东意味着什么?
例如,K.H. Group Holdings最近收入的下降值得深思。许多人可能预计,在未来一段时间内,该公司的表现仍将超过大多数其他公司,这阻止了市销售率的暴跌。你真的希望如此,否则你会无缘无故地付出相当大的代价。
我们没有分析师的预测,但您可以查看我们关于K.H. Group Holdings收益、收入和现金流的免费报告,了解最近的趋势如何为公司未来做好准备。
K.H. 集团控股的收入增长趋势如何?
K.H. Group Holdings的市销率对于一家有望实现稳健增长且重要的是表现优于行业的公司来说是典型的。
有鉴于此,令人震惊的是,K.H. Group Holdings的市销率高于其他多数公司。显然,该公司的许多投资者比最近所表示的要看涨得多,他们不愿意以任何价格抛售股票。如果市销率降至更符合近期负增长率的水平,现有股东很有可能为未来的失望做好准备。
关键要点
K.H. Group Holdings的市销率仍有所提高,尽管其最近的股价不能这样说。通常,在做出投资决策时,我们谨慎行事,不要过多地考虑市售比率,尽管这可以揭示其他市场参与者对公司的看法。
我们对K.H. Group Holdings的审查显示,鉴于该行业即将增长,其中期收入萎缩并未导致市销率低于我们的预期。随着投资者认为收入下降,市场情绪恶化的可能性相当高,这可能会使市销售率恢复到我们的预期水平。如果最近的中期收入趋势继续下去,这将使股东的投资面临重大风险,潜在投资者面临支付过高溢价的危险。
此外,您还应该了解我们在K.H. Group Holdings发现的这5个警告信号(包括3个令人担忧的警告)。
如果您不确定K.H. Group Holdings的业务实力,为什么不浏览我们的互动式股票清单,其中列出了您可能错过的其他一些公司的业务基础稳健的股票。