Kingsgate Consolidated Limited (ASX:KCN) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?

Simply Wall St.02-09

Kingsgate Consolidated (ASX:KCN) has had a rough week with its share price down 12%. But if you pay close attention, you might find that its key financial indicators look quite decent, which could ...

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But if you pay close attention, you might find that its key financial indicators look quite decent, which could ...</p>\n\n<a href=\"https://simplywall.st/stocks/au/materials/asx-kcn/kingsgate-consolidated-shares/news/kingsgate-consolidated-limited-asxkcn-stocks-been-sliding-bu\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Kingsgate Consolidated Limited (ASX:KCN) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nKingsgate Consolidated Limited (ASX:KCN) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-02-09 04:27 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/au/materials/asx-kcn/kingsgate-consolidated-shares/news/kingsgate-consolidated-limited-asxkcn-stocks-been-sliding-bu><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Kingsgate Consolidated (ASX:KCN) has had a rough week with its share price down 12%.   But if you pay close attention, you might find that its key financial indicators look quite decent, which could ...</p>\n\n<a href=\"https://simplywall.st/stocks/au/materials/asx-kcn/kingsgate-consolidated-shares/news/kingsgate-consolidated-limited-asxkcn-stocks-been-sliding-bu\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"CNSL","symbol_name":"联合通讯","start_time":0,"source_url":"https://simplywall.st/stocks/au/materials/asx-kcn/kingsgate-consolidated-shares/news/kingsgate-consolidated-limited-asxkcn-stocks-been-sliding-bu","article_id":"2410764779","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/2053000-choice1-main-header/1585186555515"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2410764779","pubTimestamp":1707424069,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Kingsgate Consolidated (ASX:KCN) has had a rough week with its share price down 12%. But if you pay close attention...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"CNSL":"联合通讯","BK7104":"黄金","KCN.AU":"KINGSGATE CONSOLIDATED LTD","BK4115":"综合电信业务"},"translate_title":"金斯盖特联合有限公司（ASX：KCN）的股票一直在下滑，但基本面看起来不错：市场会在未来修正股价吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CNSL":1,"KCN.AU":1},"content_text":"Kingsgate Consolidated (ASX:KCN) has had a rough week with its share price down 12%.   But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals.     Specifically, we decided to study Kingsgate Consolidated's  ROE in this article.    Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital.  In short, ROE shows the profit each dollar generates with respect to its shareholder investments.  Check out our latest analysis for Kingsgate Consolidated  How Do You Calculate Return On Equity?  The formula for return on equity is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Kingsgate Consolidated is:9.5% = AU$4.7m ÷ AU$50m (Based on the trailing twelve months to June 2023). The 'return' is the amount earned after tax over the last twelve months.  One way to conceptualize this is that for each A$1 of shareholders' capital it has, the company made A$0.09 in profit.   What Is The Relationship Between ROE And Earnings Growth?  We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings.  We now need to evaluate how much profit the company reinvests or \"retains\" for future growth which then gives us an idea about the growth potential of the company.  Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.  Kingsgate Consolidated's Earnings Growth And 9.5% ROE  At first glance, Kingsgate Consolidated's ROE doesn't look very promising.   However, its ROE is similar to the industry average of 10%, so we won't completely dismiss the company.   Looking at Kingsgate Consolidated's exceptional 31% five-year net income growth in particular, we are definitely impressed.  Taking into consideration that the ROE is not particularly high, we reckon that there could also be other factors at play which could be influencing the company's growth.  For instance, the company has a low payout ratio or is being managed efficiently.     Next, on comparing with the industry net income growth, we found that Kingsgate Consolidated's growth is quite high when compared to the industry average growth of 22% in the same period, which is great to see.   ASX:KCN Past Earnings Growth February 8th 2024 Earnings growth is a huge factor in stock valuation.  It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).   This then helps them determine if the stock is placed for a bright or bleak future.    If you're wondering about Kingsgate Consolidated's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.    Is Kingsgate Consolidated Using Its Retained Earnings Effectively?    Kingsgate Consolidated doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above.     Summary    On the whole, we do feel that Kingsgate Consolidated has some positive attributes.      Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business.       While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company.    Our risks dashboard would have the 2 risks we have identified for Kingsgate Consolidated.    Valuation is complex, but we're helping make it simple.Find out whether Kingsgate Consolidated is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave 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.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2410764779"}