The Kangda International Environmental Company Limited (HKG:6136) share price has fared very poorly over the last month, falling by a substantial 39%. For any long-term shareholders, the last month ends a year to forget by locking in a 61% share price decline.
In spite of the heavy fall in price, Kangda International Environmental's price-to-earnings (or "P/E") ratio of 3.9x 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 20x are quite common. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so limited.
For instance, Kangda International Environmental'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.
Check out our latest analysis for Kangda International Environmental
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 Kangda International Environmental's earnings, revenue and cash flow.
How Is Kangda International Environmental's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as depressed as Kangda International Environmental's is when the company's growth is on track to lag the market decidedly.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 69%. The last three years don't look nice either as the company has shrunk EPS by 74% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
In contrast to the company, the rest of the market is expected to grow by 25% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
With this information, we are not surprised that Kangda International Environmental is trading at a P/E lower than the market. Nonetheless, there's no guarantee the P/E has reached a floor yet with earnings going in reverse. Even just maintaining these prices could be difficult to achieve as recent earnings trends are already weighing down the shares.
The Bottom Line On Kangda International Environmental's P/E
Having almost fallen off a cliff, Kangda International Environmental's share price has pulled its P/E way down as well. 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 Kangda International Environmental maintains its low P/E on the weakness of its sliding earnings over the medium-term, as expected. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. If recent medium-term earnings trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.
You should always think about risks. Case in point, we've spotted 5 warning signs for Kangda International Environmental you should be aware of, and 2 of them are a bit unpleasant.
You might be able to find a better investment than Kangda International Environmental. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
Kangda International Environmental社(HKG:6136)の株価は、先月非常に悪く、39%急落しました。 長期保有株主にとって、先月は株価が61%下落し、忘れ去りたい年の終わりを迎えます。
価格が大幅に下落したにもかかわらず、Kangda International Environmentalの価益(P/E)倍率は3.9倍であり、香港市場の半数以上の企業が10倍以上、さらに20倍以上のP/E倍率を有していることを考えると、今の時点で堅調な買いと見なすことができます。ただし、P/E倍率をそのまま受け入れることは賢明ではありません。制限がある理由があるかもしれません。
たとえば、Kangda International Environmentalの最近の減少した収益は、少し考える材料となるでしょう。多くの人々が、失望する収益性能が引き続き、あるいは加速することを予想しており、これがP/E倍率を抑圧しているのかもしれません。ただし、これが実現しない場合は、既存株主は株価の将来的な方向に楽観的な気持ちになるかもしれません。
Kangda International Environmentalの最新の分析をチェックしてください。
アナリストの予測はありませんが、Kangda International Environmentalの収益、売上高、キャッシュフローについての無料レポートをチェックすることで、最近の傾向が今後の会社をどのように設定しているかを確認することができます。
Kangda International Environmentalの成長はどうですか?
Kangda International Environmentalが示すP/Eと同様に低迷していると、同社の成長が市場を明確に下回る方向に向かっているときだけです。
この情報から、Kangda International Environmentalが市場よりも低いP/Eで取引していることには驚きません。ただし、収益が逆転するため、P/Eがすでに限界に達したことを保証するものではありません。これらの価格を維持するだけでも、最近の収益傾向が株式を押し下げているため、達成することは困難かもしれません。
Kangda International EnvironmentalのP/E倍率に関する結論:Kangda International Environmentalの株価がほとんどが崖から落ちた状況で、P/E倍率も下落しました。価格収益率の主な利点は、現在の投資家の感情や将来の期待を測定することであり、評価機関としての力はあまりありません。
Kangda International Environmentalが中期的な利益の下落によって低いP/Eを維持していることがわかりました。現在、株主たちは、将来の収益がおそらく良いサプライズを提供しないということを認めて、低いP/Eを受け入れています。最近の中期的な利益傾向がこのような状況下で強く前進する方向にある場合、株価が強く動くことは難しいでしょう。
リスクについては常に考える必要があります。例えば、Kangda International Environmentalでは、認識すべき5つの警告サインを発見しました。そのうち2つは少し不快です。Kangda International Environmentalより良い投資先を見つけることができるかもしれません。可能性がある候補のリストを入手するには、低いP/Eで取引される興味深い企業の無料リストを確認してください。
この記事には、株式の売買を推奨するものではなく、あくまでKangda International Environmentalについての解説に基づいています。株式の購入や売却にはリスクが伴い、投資家は自己責任において行う必要があります。
Kangda International Environmentalよりも優れた投資先を見つけることができるかもしれません。可能性がある候補のリストを入手するには、低いP/Eで取引される興味深い企業の無料リストを確認してください。