Those holding Kinetix Systems Holdings Limited (HKG:8606) shares would be relieved that the share price has rebounded 28% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Looking back a bit further, it's encouraging to see the stock is up 37% in the last year.
In spite of the firm bounce in price, when close to half the companies operating in Hong Kong's IT industry have price-to-sales ratios (or "P/S") above 1.1x, you may still consider Kinetix Systems Holdings as an enticing stock to check out with its 0.5x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.
What Does Kinetix Systems Holdings' P/S Mean For Shareholders?
For example, consider that Kinetix Systems Holdings' financial performance has been pretty ordinary lately as revenue growth is non-existent. Perhaps the market believes the recent lacklustre revenue performance is a sign of future underperformance relative to industry peers, hurting the P/S. Those who are bullish on Kinetix Systems Holdings will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.
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 Kinetix Systems Holdings' earnings, revenue and cash flow.
Is There Any Revenue Growth Forecasted For Kinetix Systems Holdings?
Kinetix Systems Holdings' P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the industry.
If we review the last year of revenue, the company posted a result that saw barely any deviation from a year ago. The lack of growth did nothing to help the company's aggregate three-year performance, which is an unsavory 7.2% drop in revenue. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
In contrast to the company, the rest of the industry is expected to grow by 11% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
In light of this, it's understandable that Kinetix Systems Holdings' P/S would sit below the majority of other companies. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.
What We Can Learn From Kinetix Systems Holdings' P/S?
Despite Kinetix Systems Holdings' share price climbing recently, its P/S still lags most other companies. Using the price-to-sales 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.
As we suspected, our examination of Kinetix Systems Holdings revealed its shrinking revenue over the medium-term is contributing to its low P/S, given the industry is set to grow. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. If recent medium-term revenue trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.
Before you settle on your opinion, we've discovered 4 warning signs for Kinetix Systems Holdings (1 can't be ignored!) that you should be aware of.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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.
那些持有Kinetix Systems Holdings Limited(HKG: 8606)股票的人會鬆一口氣,因爲股價在過去三十天中反彈了28%,但它需要繼續修復最近對投資者投資組合造成的損失。再往前看,該股去年上漲了37%,令人鼓舞。
儘管公司股價反彈,但當將近一半在香港IT行業運營的公司的市銷率(或 “市銷率”)高於1.1倍時,您仍然可以將Kinetix Systems Holdings視爲具有0.5倍市銷率的誘人股票。但是,僅按面值計算市銷率是不明智的,因爲可以解釋其有限的原因。
Kinetix Systems Holdings的市銷率對股東意味着什麼?
例如,假設由於收入不增長,Kinetix Systems Holdings最近的財務表現相當普通。也許市場認爲,近期收入表現乏善可陳是未來相對於業內同行表現不佳的標誌,這損害了市銷率。那些看好Kinetix Systems Holdings的人會希望情況並非如此,這樣他們就可以以較低的估值買入該股。
我們沒有分析師的預測,但您可以查看我們關於Kinetix Systems Holdings收益、收入和現金流的免費報告,了解最近的趨勢如何爲公司未來做好準備。
預計Kinetix Systems Holdings的收入會增長嗎?
Kinetix Systems Holdings的市銷率對於一家預計增長有限,而且重要的是表現不如行業的公司來說是典型的。