ZK International Group Co., Ltd. (NASDAQ:ZKIN) Might Not Be As Mispriced As It Looks After Plunging 28%
ZK International Group Co., Ltd. (NASDAQ:ZKIN) Might Not Be As Mispriced As It Looks After Plunging 28%
ZK International Group Co., Ltd. (NASDAQ:ZKIN) shares have retraced a considerable 28% in the last month, reversing a fair amount of their solid recent performance. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 29% share price drop.
Since its price has dipped substantially, ZK International Group's price-to-sales (or "P/S") ratio of 0.2x might make it look like a buy right now compared to the Metals and Mining industry in the United States, where around half of the companies have P/S ratios above 1.3x and even P/S above 4x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.
Check out our latest analysis for ZK International Group
How ZK International Group Has Been Performing
The revenue growth achieved at ZK International Group over the last year would be more than acceptable for most companies. One possibility is that the P/S is low because investors think this respectable revenue growth might actually underperform the broader industry in the near future. If that doesn't eventuate, then existing shareholders have reason to be optimistic 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 ZK International Group will help you shine a light on its historical performance.What Are Revenue Growth Metrics Telling Us About The Low P/S?
The only time you'd be truly comfortable seeing a P/S as low as ZK International Group's is when the company's growth is on track to lag the industry.
Taking a look back first, we see that the company managed to grow revenues by a handy 9.0% last year. The latest three year period has also seen an excellent 51% overall rise in revenue, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing revenues over that time.
When compared to the industry's one-year growth forecast of 9.7%, the most recent medium-term revenue trajectory is noticeably more alluring
In light of this, it's peculiar that ZK International Group's P/S sits below the majority of other companies. Apparently some shareholders believe the recent performance has exceeded its limits and have been accepting significantly lower selling prices.
The Bottom Line On ZK International Group's P/S
ZK International Group's P/S has taken a dip along with its share price. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.
Our examination of ZK International Group revealed its three-year revenue trends aren't boosting its P/S anywhere near as much as we would have predicted, given they look better than current industry expectations. When we see strong revenue with faster-than-industry growth, we assume there are some significant underlying risks to the company's ability to make money which is applying downwards pressure on the P/S ratio. While recent revenue trends over the past medium-term suggest that the risk of a price decline is low, investors appear to perceive a likelihood of revenue fluctuations in the future.
You need to take note of risks, for example - ZK International Group has 4 warning signs (and 2 which are a bit concerning) we think you should know about.
Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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.
ZK國際集團有限公司(納斯達克股票代碼:ZKIN)的股價在上個月大幅回撤了28%,扭轉了近期的穩健表現。在過去十二個月中已經持股的股東沒有獲得回報,反而坐視股價下跌了29%。
由於價格大幅下跌,ZK International Group的0.2倍市銷率(或 “市盈率”)與美國的金屬和採礦業相比,目前看上去像買入。在美國,大約一半的公司的市銷率高於1.3倍,甚至市盈率高於4倍也很常見。但是,我們需要更深入地挖掘以確定降低市銷率是否有合理的依據。
查看我們對ZK國際集團的最新分析
ZK 國際集團的表現如何
ZK International Group去年實現的收入增長對於大多數公司來說是完全可以接受的。一種可能性是市銷率很低,因爲投資者認爲這種可觀的收入增長在不久的將來實際上可能低於整個行業。如果最終沒有發生這種情況,那麼現有股東就有理由對股價的未來走向持樂觀態度。
想全面了解公司的收益、收入和現金流嗎?那麼我們關於ZK國際集團的免費報告將幫助您了解其歷史表現。收入增長指標告訴我們低市銷率有哪些?
只有當公司的增長有望落後於該行業時,你才能真正放心地看到像ZK International Group一樣低的市銷率。
首先回顧一下,我們發現該公司去年的收入成功增長了9.0%。在最近三年中,總收入也實現了51%的出色增長,這在一定程度上得益於其短期表現。因此,我們可以首先確認該公司在此期間在增加收入方面做得很好。
與該行業9.7%的年度增長預測相比,最新的中期收入軌跡明顯更具吸引力
有鑑於此,奇怪的是,ZK國際集團的市銷率低於其他多數公司。顯然,一些股東認爲最近的表現已經超過了極限,並且一直在接受大幅降低的銷售價格。
ZK International Group 市銷率的底線
ZK國際集團的市銷率與股價一起下跌。通常,我們傾向於限制使用市銷率來確定市場對公司整體健康狀況的看法。
我們對ZK International Group的調查顯示,鑑於其三年收入趨勢看起來好於當前的行業預期,其市銷率增長幅度沒有我們預期的那麼大。當我們看到強勁的收入和比行業更快的增長速度時,我們假設公司的盈利能力存在一些重大的潛在風險,這給市銷率帶來了下行壓力。儘管過去中期最近的收入趨勢表明價格下跌的風險很低,但投資者似乎認爲未來收入可能會出現波動。
您需要注意風險,例如,ZK International Group有4個警告標誌(其中2個有點令人擔憂),我們認爲您應該知道。
當然,具有良好收益增長曆史的盈利公司通常是更安全的選擇。因此,您可能希望看到這些免費收集的市盈率合理且收益增長強勁的其他公司。
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Simply Wall St 的這篇文章本質上是籠統的。我們僅使用公正的方法提供基於歷史數據和分析師預測的評論,我們的文章並非旨在提供財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不會考慮最新的價格敏感型公司公告或定性材料。華爾街只是沒有持有上述任何股票的頭寸。
譯文內容由第三人軟體翻譯。
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