Market Might Still Lack Some Conviction On Meinian Onehealth Healthcare Holdings Co., Ltd. (SZSE:002044) Even After 30% Share Price Boost

Meinian Onehealth Healthcare Holdings Co., Ltd. (SZSE:002044) shareholders would be excited to see that the share price has had a great month, posting a 30% gain and recovering from prior weakness. 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.

Although its price has surged higher, there still wouldn't be many who think Meinian Onehealth Healthcare Holdings' price-to-sales (or "P/S") ratio of 2x is worth a mention when the median P/S in China's Healthcare industry is similar at about 1.7x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

See our latest analysis for Meinian Onehealth Healthcare Holdings

What Does Meinian Onehealth Healthcare Holdings' Recent Performance Look Like?

Recent times have been advantageous for Meinian Onehealth Healthcare Holdings as its revenues have been rising faster than most other companies. It might be that many expect the strong revenue performance to wane, which has kept the P/S ratio from rising. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

Want the full picture on analyst estimates for the company? Then our free report on Meinian Onehealth Healthcare Holdings will help you uncover what's on the horizon.

Is There Some Revenue Growth Forecasted For Meinian Onehealth Healthcare Holdings?

The only time you'd be comfortable seeing a P/S like Meinian Onehealth Healthcare Holdings' is when the company's growth is tracking the industry closely.

Retrospectively, the last year delivered a decent 6.3% gain to the company's revenues. The solid recent performance means it was also able to grow revenue by 16% in total over the last three years. Accordingly, shareholders would have probably been satisfied with the medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 16% during the coming year according to the five analysts following the company. Meanwhile, the rest of the industry is forecast to only expand by 13%, which is noticeably less attractive.

With this in consideration, we find it intriguing that Meinian Onehealth Healthcare Holdings' P/S is closely matching its industry peers. It may be that most investors aren't convinced the company can achieve future growth expectations.

The Bottom Line On Meinian Onehealth Healthcare Holdings' P/S

Meinian Onehealth Healthcare Holdings appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in the industry Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We've established that Meinian Onehealth Healthcare Holdings currently trades on a lower than expected P/S since its forecasted revenue growth is higher than the wider industry. Perhaps uncertainty in the revenue forecasts are what's keeping the P/S ratio consistent with the rest of the industry. However, if you agree with the analysts' forecasts, you may be able to pick up the stock at an attractive price.

A lot of potential risks can sit within a company's balance sheet. Our free balance sheet analysis for Meinian Onehealth Healthcare Holdings with six simple checks will allow you to discover any risks that could be an issue.

If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.

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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.