Millennium Group International Holdings Limited's (NASDAQ:MGIH) 88% Share Price Surge Not Quite Adding Up
Millennium Group International Holdings Limited's (NASDAQ:MGIH) 88% Share Price Surge Not Quite Adding Up
Despite an already strong run, Millennium Group International Holdings Limited (NASDAQ:MGIH) shares have been powering on, with a gain of 88% in the last thirty days. While recent buyers may be laughing, long-term holders might not be as pleased since the recent gain only brings the stock back to where it started a year ago.
Even after such a large jump in price, it's still not a stretch to say that Millennium Group International Holdings' price-to-sales (or "P/S") ratio of 0.5x right now seems quite "middle-of-the-road" compared to the Packaging industry in the United States, where the median P/S ratio is around 0.8x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
How Millennium Group International Holdings Has Been Performing
For example, consider that Millennium Group International Holdings' financial performance has been poor lately as its revenue has been in decline. Perhaps investors believe the recent revenue performance is enough to keep in line with the industry, which is keeping the P/S from dropping off. If you like the company, you'd at least be hoping this is the case so that you could potentially pick up some stock while it's not quite in favour.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Millennium Group International Holdings will help you shine a light on its historical performance.Is There Some Revenue Growth Forecasted For Millennium Group International Holdings?
In order to justify its P/S ratio, Millennium Group International Holdings would need to produce growth that's similar to the industry.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 31%. The last three years don't look nice either as the company has shrunk revenue by 25% in aggregate. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 0.07% shows it's an unpleasant look.
With this information, we find it concerning that Millennium Group International Holdings is trading at a fairly similar P/S compared to the industry. Apparently many investors in the company are way less bearish than recent times would indicate and aren't willing to let go of their stock right now. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh on the share price eventually.
What We Can Learn From Millennium Group International Holdings' P/S?
Its shares have lifted substantially and now Millennium Group International Holdings' P/S is back within range of the industry median. 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 look at Millennium Group International Holdings revealed its shrinking revenues over the medium-term haven't impacted the P/S as much as we anticipated, given the industry is set to grow. Even though it matches the industry, we're uncomfortable with the current P/S ratio, as this dismal revenue performance is unlikely to support a more positive sentiment for long. Unless the recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
Plus, you should also learn about these 3 warning signs we've spotted with Millennium Group International Holdings (including 2 which are concerning).
If these risks are making you reconsider your opinion on Millennium Group International Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.
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,但千禧集團國際控股有限公司(納斯達克股票代碼:MGIH)的股價一直在上漲,在過去的三十天中上漲了88%。儘管最近的買家可能在笑,但長揸者可能不那麼高興,因爲最近的漲勢只會使該股恢復到一年前的起點。
即使在價格大幅上漲之後,可以毫不誇張地說,與美國包裝行業相比,千禧集團國際控股公司0.5倍的市銷率(或 “市盈率”)目前看來相當 “處於中間位置”,後者的市銷率中位數約爲0.8倍。但是,不加解釋地忽略市銷率是不明智的,因爲投資者可能會忽視一個明顯的機會或一個代價高昂的錯誤。
千禧集團國際控股的表現如何
例如,假設千禧集團國際控股公司最近由於收入下降而財務表現不佳。也許投資者認爲最近的收入表現足以與該行業保持一致,這阻止了市銷率的下降。如果你喜歡這家公司,你至少希望情況確實如此,這樣你就有可能在它不太受青睞的情況下買入一些股票。
想全面了解公司的收益、收入和現金流嗎?那麼我們關於千禧集團國際控股的免費報告將幫助您了解其歷史表現。預計千禧集團國際控股的收入會有所增長嗎?
爲了證明其市銷率是合理的,千禧集團國際控股公司需要實現與該行業相似的增長。
首先回顧一下,該公司去年的收入增長並不令人興奮,因爲它公佈了令人失望的31%的跌幅。過去三年看起來也不太好,因爲該公司的總收入減少了25%。因此,可以公平地說,最近的收入增長對公司來說是不可取的。
將中期收入軌跡與整個行業對0.07%的增長預測進行權衡,可以看出這是一種令人不快的表情。
有了這些信息,我們發現千禧集團國際控股公司的交易市銷率與該行業相似。顯然,該公司的許多投資者並不像最近所表明的那樣看跌,他們現在不願意放棄股票。只有最大膽的人才會假設這些價格是可持續的,因爲近期收入趨勢的延續最終可能會壓制股價。
我們可以從千禧集團國際控股公司的市銷率中學到什麼?
其股價已大幅上漲,現在千禧集團國際控股的市銷率已恢復在行業中位數範圍內。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。
我們對千禧集團國際控股公司的調查顯示,鑑於該行業即將增長,其中期收入萎縮對市銷售率的影響沒有我們預期的那麼大。儘管它與行業相匹配,但我們對當前的市銷率感到不舒服,因爲這種慘淡的收入表現不太可能長期支撐更積極的情緒。除非最近的中期狀況明顯改善,否則投資者將很難接受股價作爲公允價值。
另外,你還應該了解我們在千禧集團國際控股公司發現的這三個警告信號(包括兩個令人擔憂的警告)。
如果這些風險讓你重新考慮你對千禧集團國際控股的看法,請瀏覽我們的互動式高質量股票清單,了解還有什麼。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
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根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。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,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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