Despite an already strong run, Kinetic Development Group Limited (HKG:1277) shares have been powering on, with a gain of 28% in the last thirty days. Looking back a bit further, it's encouraging to see the stock is up 38% in the last year.
Although its price has surged higher, Kinetic Development Group's price-to-earnings (or "P/E") ratio of 3.3x might still make it look like a strong buy right now compared to the market in Hong Kong, where around half of the companies have P/E ratios above 10x and even P/E's above 19x are quite common. However, the P/E might be quite low for a reason and it requires further investigation to determine if it's justified.
For instance, Kinetic Development Group's receding earnings in recent times would have to be some food for thought. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. However, if this doesn't eventuate then existing shareholders may be feeling optimistic about the future direction of the share price.
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 Kinetic Development Group's earnings, revenue and cash flow.
Is There Any Growth For Kinetic Development Group?
Kinetic Development Group's P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
Retrospectively, the last year delivered a frustrating 22% decrease to the company's bottom line. However, a few very strong years before that means that it was still able to grow EPS by an impressive 155% in total over the last three years. So we can start by confirming that the company has generally done a very good job of growing earnings over that time, even though it had some hiccups along the way.
Comparing that to the market, which is only predicted to deliver 21% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised earnings results.
With this information, we find it odd that Kinetic Development Group is trading at a P/E lower than the market. It looks like most investors are not convinced the company can maintain its recent growth rates.
The Final Word
Kinetic Development Group's recent share price jump still sees its P/E sitting firmly flat on the ground. We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
We've established that Kinetic Development Group currently trades on a much lower than expected P/E since its recent three-year growth is higher than the wider market forecast. There could be some major unobserved threats to earnings preventing the P/E ratio from matching this positive performance. At least price risks look to be very low if recent medium-term earnings trends continue, but investors seem to think future earnings could see a lot of volatility.
Before you settle on your opinion, we've discovered 1 warning sign for Kinetic Development Group that you should be aware of.
If you're unsure about the strength of Kinetic Development Group's 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.
尽管已经表现强劲,但Kinetic Development Group Limited(HKG: 1277)的股价仍在上涨,在过去三十天中上涨了28%。再往前看,该股去年上涨了38%,令人鼓舞。
尽管其价格飙升,但与香港市场相比,Kinetic Development Group的3.3倍市盈率(或 “市盈率”)目前仍可能使其看起来像是一个强劲的买盘。在香港,约有一半的公司的市盈率超过10倍,甚至市盈率高于19倍也很常见。但是,市盈率可能很低是有原因的,需要进一步调查以确定其是否合理。
例如,Kinetic Development Group最近收益的下降值得深思。许多人可能预计,令人失望的收益表现将持续或加速,这抑制了市盈率。但是,如果最终没有出现这种情况,那么现有股东可能会对股价的未来走向感到乐观。
我们没有分析师的预测,但您可以查看我们关于Kinetic Development Group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。
Kinetic 开发集团有增长吗?
Kinetic Development Group的市盈率对于预计增长非常不佳甚至收益下降的公司来说是典型的,更重要的是,其表现要比市场差得多。
有了这些信息,我们觉得奇怪的是,Kinetic Development Group的市盈率低于市场。看来大多数投资者不相信该公司能够维持其最近的增长率。
最后一句话
Kinetic Development Group最近的股价上涨仍使其市盈率稳步持平。我们可以说,市盈率的力量主要不在于作为估值工具,而是衡量当前投资者情绪和未来预期。
我们已经确定,Kinetic Development Group目前的市盈率远低于预期,因为其最近三年的增长高于更广泛的市场预测。可能存在一些未观察到的重大收益威胁,使市盈率无法与这种积极表现相提并论。如果最近的中期收益趋势持续下去,至少价格风险看起来很低,但投资者似乎认为未来的收益可能会出现很大的波动。
在你确定自己的意见之前,我们已经发现了 Kinetic Development Group 的一个警告信号,你应该注意这一点。
如果您不确定Kinetic Development Group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。