Modern Healthcare Technology Holdings Limited (HKG:919)’s popularity with investors is in jeopardy as the stock falls 29%
the Modern Healthcare Technology Holdings Limited (HKG:919) The stock price has done very poorly over the past month, falling 29%. Looking at the big picture, even after this bad month, the stock is up 50% over the past year.
Even after such a steep price drop, it’s still not a stretch to say that Modern Healthcare Technology Holdings’ 8.5x price-to-earnings (or “P/E”) ratio currently looks pretty “middle-of-the-road”. -road” versus the Hong Kong market, where the median P/E ratio is around 9x. However, investors could overlook a clear opportunity or potential setback if there is no rational basis for the P/E.
To illustrate, earnings have deteriorated at Modern Healthcare Technology Holdings over the past year, which is far from ideal. One possibility is that the P/E is moderate because investors believe the company could still do enough to be in line with the broader market in the near future. If not, existing shareholders might be a bit worried about the viability of the share price.
Check out our latest analysis for Modern Healthcare Technology Holdings
We don’t have analyst forecasts, but you can see how recent trends are preparing the company for the future by checking out our free Modern Healthcare Technology Holdings earnings, revenue and cash flow report.
What is the growth trend of Modern Healthcare Technology Holdings?
The only time you’d be comfortable seeing a P/E like Modern Healthcare Technology Holdings’ is when the company’s growth closely follows the market.
If we look at the last year of earnings, the company’s earnings fell by 38%, which is disheartening. Unfortunately, this has taken it back to where it started three years ago, with EPS growth being virtually non-existent overall during this time. It therefore seems to us that the company has had a mixed result in terms of earnings growth during this period.
Comparing that to the market, which is expected to grow 19% over the next 12 months, the company’s momentum is weaker based on recent mid-term annualized results.
In light of this, it is curious that Modern Healthcare Technology Holdings’ P/E is 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 for exposure to the stock. They could expect future disappointments if the P/E falls to levels more in line with recent growth rates.
The end result of Modern Healthcare Technology Holdings P/E
Following the fall in Modern Healthcare Technology Holdings’ share price, its P/E now clings to the market’s median P/E. While the price-to-earnings ratio shouldn’t be the determining factor in whether or not you buy a stock, it is a very capable barometer of earnings expectations.
Our review of Modern Healthcare Technology Holdings revealed that its three-year earnings trends are not impacting its P/E as much as we would have expected, given that they look worse than current market expectations. Marlet. At this time, we are not comfortable with the P/E as this earnings performance should not support more positive sentiment for long. Unless recent medium-term conditions improve, it is difficult to accept these prices as reasonable.
That said, know Modern Healthcare Technology Holdings Shows 4 Warning Signs in our investment analysis, you should know.
Sure, you might also be able to find better stock than Modern Healthcare Technology Holdings. So you might want to see this free collection of other companies with P/Es less than 20x and strong earnings growth.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.