Determine the classification: This methodology would consider LHSG a "fast-grower".
Look at the P/E/Growth Ratio (PASS) : The investor should examine the P/E (63.8) relative to the growth rate (216.8%), based on the three year historical growth rate, for a company as this is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for LHSG (0.29) makes it an excellent buy.
Look at the P/E Ratio (NEUTRAL) : For companies with sales greater than 1 billion, this methodology likes to see that the P/E ratio remain below 40. Companies this large could have a difficult time maintaining a growth rate high enough to support a P/E above this threshold. LHSG, whose sales are 207.6 million, would not be considered large enough, according to this methodology, to apply the P/E ratio analysis. However, an investor can analyze the P/E ratio relative to the EPS growth rate.
Look at Inventory To Sales (FAIL) : When inventories increases faster than sales, it is a red flag. Unfortunately we do not have sufficient data for LHSG to evaluate this criteria.
Look at the EPS Growth Rate (FAIL) : This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for LHSG is 216.8%, based on the three year historical growth rate, which would be considered too fast.
Look at the Total Debt/Equity Ratio (PASS) : This methodology would consider the Debt/Equity ratio for LHSG (0.0%) to be wonderfully low (equity is at least ten times debt). This ratio is one quick way to determine the financial strength of the company.