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.
儘管已經表現強勁,但Kinetic Development Group Limited(HKG: 1277)的股價仍在上漲,在過去三十天中上漲了28%。再往前看,該股去年上漲了38%,令人鼓舞。
儘管其價格飆升,但與香港市場相比,Kinetic Development Group的3.3倍市盈率(或 “市盈率”)目前仍可能使其看起來像是一個強勁的買盤。在香港,約有一半的公司的市盈率超過10倍,甚至市盈率高於19倍也很常見。但是,市盈率可能很低是有原因的,需要進一步調查以確定其是否合理。
例如,Kinetic Development Group最近收益的下降值得深思。許多人可能預計,令人失望的收益表現將持續或加速,這抑制了市盈率。但是,如果最終沒有出現這種情況,那麼現有股東可能會對股價的未來走向感到樂觀。
我們沒有分析師的預測,但您可以查看我們關於Kinetic Development Group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。
Kinetic 開發集團有增長嗎?
Kinetic Development Group的市盈率對於預計增長非常不佳甚至收益下降的公司來說是典型的,更重要的是,其表現要比市場差得多。
有了這些信息,我們覺得奇怪的是,Kinetic Development Group的市盈率低於市場。看來大多數投資者不相信該公司能夠維持其最近的增長率。
最後一句話
Kinetic Development Group最近的股價上漲仍使其市盈率穩步持平。我們可以說,市盈率的力量主要不在於作爲估值工具,而是衡量當前投資者情緒和未來預期。
我們已經確定,Kinetic Development Group目前的市盈率遠低於預期,因爲其最近三年的增長高於更廣泛的市場預測。可能存在一些未觀察到的重大收益威脅,使市盈率無法與這種積極表現相提並論。如果最近的中期收益趨勢持續下去,至少價格風險看起來很低,但投資者似乎認爲未來的收益可能會出現很大的波動。
在你確定自己的意見之前,我們已經發現了 Kinetic Development Group 的一個警告信號,你應該注意這一點。
如果您不確定Kinetic Development Group的業務實力,爲什麼不瀏覽我們的互動式股票清單,其中列出了您可能錯過的其他一些公司的業務基礎穩健的股票。