To the annoyance of some shareholders, OrbusNeich Medical Group Holdings Limited (HKG:6929) shares are down a considerable 28% in the last month, which continues a horrid run for the company. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 70% loss during that time.
Although its price has dipped substantially, it's still not a stretch to say that OrbusNeich Medical Group Holdings' price-to-earnings (or "P/E") ratio of 8.4x right now seems quite "middle-of-the-road" compared to the market in Hong Kong, where the median P/E ratio is around 9x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.
With its earnings growth in positive territory compared to the declining earnings of most other companies, OrbusNeich Medical Group Holdings has been doing quite well of late. One possibility is that the P/E is moderate because investors think the company's earnings will be less resilient moving forward. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.
SEHK:6929 Price to Earnings Ratio vs Industry March 11th 2024 Keen to find out how analysts think OrbusNeich Medical Group Holdings' future stacks up against the industry? In that case, our free report is a great place to start.
Does Growth Match The P/E?
In order to justify its P/E ratio, OrbusNeich Medical Group Holdings would need to produce growth that's similar to the market.
Retrospectively, the last year delivered an exceptional 72% gain to the company's bottom line. Pleasingly, EPS has also lifted 344% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Turning to the outlook, the next three years should generate growth of 9.6% per year as estimated by the three analysts watching the company. Meanwhile, the rest of the market is forecast to expand by 15% per year, which is noticeably more attractive.
In light of this, it's curious that OrbusNeich Medical Group Holdings' P/E sits in line with the majority of other companies. It seems most investors are ignoring the fairly limited growth expectations and are willing to pay up for exposure to the stock. These shareholders may be setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.
The Bottom Line On OrbusNeich Medical Group Holdings' P/E
With its share price falling into a hole, the P/E for OrbusNeich Medical Group Holdings looks quite average now. Using the price-to-earnings 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.
We've established that OrbusNeich Medical Group Holdings currently trades on a higher than expected P/E since its forecast growth is lower than the wider market. Right now we are uncomfortable with the P/E as the predicted future earnings aren't likely to support a more positive sentiment for long. This places shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
The company's balance sheet is another key area for risk analysis. Take a look at our free balance sheet analysis for OrbusNeich Medical Group Holdings with six simple checks on some of these key factors.
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
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令一些股東煩惱的是,OrbusNeich Medical Group Holdings Limited(HKG: 6929)的股價在上個月下跌了28%,這延續了公司的糟糕表現。對於股東來說,最近的下跌結束了災難性的十二個月,在此期間,股東虧損了70%。
儘管其價格已大幅下跌,但可以毫不誇張地說,與香港市場相比,OrbusNeich Medical Group Holdings的8.4倍市盈率(或 “市盈率”)目前看來相當 “處於中間位置”,香港市場的市盈率中位數約爲9倍。但是,如果市盈率沒有合理的基礎,投資者可能會忽略明顯的機會或潛在的挫折。
與大多數其他公司的收益下降相比,OrbusNeich Medical Group Holdings的收益增長處於正值區間,最近表現良好。一種可能性是市盈率適中,因爲投資者認爲公司未來的收益彈性將降低。如果不是,那麼現有股東就有理由對股價的未來走向感到樂觀。
SEHK: 6929 對比行業的市盈率 2024 年 3 月 11 日 想了解分析師如何看待OrbusNeich Medical Group Holdings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。
增長與市盈率相匹配嗎?
爲了證明其市盈率是合理的,OrbusNeich Medical Group Holdings需要實現與市場相似的增長。