NYSE:MNSO, a growth stock which is not overvalued.

Last update: Oct 31, 2024

MINISO GROUP HOLDING LTD-ADR (NYSE:MNSO) was identified as an affordable growth stock by our stock screener. NYSE:MNSO is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Understanding NYSE:MNSO's Growth

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:MNSO has earned a 8 for growth:

MNSO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 178.59%, which is quite impressive.
The Revenue has grown by 22.67% in the past year. This is a very strong growth!
The Revenue has been growing by 8.51% on average over the past years. This is quite good.
Based on estimates for the next years, MNSO will show a very strong growth in Earnings Per Share. The EPS will grow by 32.67% on average per year.
MNSO is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 29.00% yearly.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Assessing Valuation for NYSE:MNSO

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:MNSO, the assigned 6 reflects its valuation:

Based on the Price/Earnings ratio of 10.84, the valuation of MNSO can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of MNSO indicates a somewhat cheap valuation: MNSO is cheaper than 71.88% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 30.69. MNSO is valued rather cheaply when compared to this.
62.50% of the companies in the same industry are more expensive than MNSO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.55, MNSO is valued a bit cheaper.
MNSO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MNSO has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as MNSO's earnings are expected to grow with 32.67% in the coming years.

Evaluating Health: NYSE:MNSO

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:MNSO, the assigned 7 for health provides valuable insights:

An Altman-Z score of 6.93 indicates that MNSO is not in any danger for bankruptcy at the moment.
MNSO's Altman-Z score of 6.93 is amongst the best of the industry. MNSO outperforms 90.63% of its industry peers.
MNSO has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
MNSO's Debt to Equity ratio of 0.15 is fine compared to the rest of the industry. MNSO outperforms 68.75% of its industry peers.
MNSO has a Current Ratio of 2.38. This indicates that MNSO is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 2.38, MNSO belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
With a decent Quick ratio value of 1.93, MNSO is doing good in the industry, outperforming 78.13% of the companies in the same industry.

Assessing Profitability for NYSE:MNSO

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:MNSO, the assigned 7 is noteworthy for profitability:

Looking at the Return On Assets, with a value of 15.39%, MNSO belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
The Return On Equity of MNSO (24.94%) is better than 78.13% of its industry peers.
With an excellent Return On Invested Capital value of 19.84%, MNSO belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
The 3 year average ROIC (9.40%) for MNSO is below the current ROIC(19.84%), indicating increased profibility in the last year.
The Profit Margin of MNSO (15.71%) is better than 93.75% of its industry peers.
MNSO has a Operating Margin of 19.87%. This is amongst the best in the industry. MNSO outperforms 93.75% of its industry peers.
MNSO's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of MNSO has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of MNSO for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.