IVD Medical Holding Limited (HKG:1931) shareholders that were waiting for something to happen have been dealt a blow with a 29% share price drop in the last month. Longer-term shareholders will rue the drop in the share price, since it's now virtually flat for the year after a promising few quarters.
Although its price has dipped substantially, it's still not a stretch to say that IVD Medical Holding's 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 10x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.
IVD Medical Holding has been doing a good job lately as it's been growing earnings at a solid pace. It might be that many expect the respectable earnings performance to wane, which has kept the P/E from rising. If that doesn't eventuate, then existing shareholders probably aren't too pessimistic about the future direction of the share price.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on IVD Medical Holding will help you shine a light on its historical performance.
How Is IVD Medical Holding's Growth Trending?
The only time you'd be comfortable seeing a P/E like IVD Medical Holding's is when the company's growth is tracking the market closely.
Taking a look back first, we see that the company managed to grow earnings per share by a handy 13% last year. Pleasingly, EPS has also lifted 47% in aggregate from three years ago, partly thanks to the last 12 months of growth. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth.
Comparing that to the market, which is predicted to deliver 21% growth in the next 12 months, the company's momentum is weaker based on recent medium-term annualised earnings results.
In light of this, it's curious that IVD Medical Holding's P/E sits in line with the majority of other companies. It seems most investors are ignoring the fairly limited recent growth rates and are willing to pay up for exposure to the stock. Maintaining these prices will be difficult to achieve as a continuation of recent earnings trends is likely to weigh down the shares eventually.
The Key Takeaway
IVD Medical Holding's plummeting stock price has brought its P/E right back to the rest of the market. 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.
Our examination of IVD Medical Holding revealed its three-year earnings trends aren't impacting its P/E as much as we would have predicted, given they look worse than current market expectations. Right now we are uncomfortable with the P/E as this earnings performance isn't likely to support a more positive sentiment for long. Unless the recent medium-term conditions improve, it's challenging to accept these prices as being reasonable.
Before you settle on your opinion, we've discovered 2 warning signs for IVD Medical Holding that you should be aware of.
If these risks are making you reconsider your opinion on IVD Medical Holding, explore our interactive list of high quality stocks to get an idea of what else is out there.
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上個月股價下跌了29%,這給一直在等待事情發生的IVD Medical Holding Limited(HKG: 1931)的股東遭受了打擊。長期股東將爲股價的下跌感到遺憾,因爲在經歷了幾個令人鼓舞的季度之後,今年的股價幾乎持平。
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,IVD Medical Holding的8.4倍市盈率(或 “市盈率”)的中位數約爲10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。
IVD Medical Holding最近表現不錯,其收益一直在穩步增長。可能是許多人預計可觀的收益表現將減弱,這阻礙了市盈率的上升。如果最終沒有發生這種情況,那麼現有股東對股價的未來走向可能不會太悲觀。
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IVD Medical Holding的增長趨勢如何?
只有當公司的增長密切關注市場時,你才能放心地看到像IVD Medical Holding這樣的市盈率。