Explore KPJ Healthcare Berhad's Fair Values from the Community and select yours
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in KPJ Healthcare Berhad (KLSE:KPJ). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide KPJ Healthcare Berhad with the means to add long-term value to shareholders.
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Over the last three years, KPJ Healthcare Berhad has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. It's good to see that KPJ Healthcare Berhad's EPS has grown from RM0.064 to RM0.077 over twelve months. There's little doubt shareholders would be happy with that 21% gain.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note KPJ Healthcare Berhad achieved similar EBIT margins to last year, revenue grew by a solid 14% to RM4.0b. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
See our latest analysis for KPJ Healthcare Berhad
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for KPJ Healthcare Berhad's future EPS 100% free.
As a general rule, it's worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. The median total compensation for CEOs of companies similar in size to KPJ Healthcare Berhad, with market caps between RM8.5b and RM27b, is around RM5.0m.