Revenues Working Against Seres Therapeutics, Inc.'s (NASDAQ:MCRB) Share Price Following 27% Dive
Revenues Working Against Seres Therapeutics, Inc.'s (NASDAQ:MCRB) Share Price Following 27% Dive
To the annoyance of some shareholders, Seres Therapeutics, Inc. (NASDAQ:MCRB) shares are down a considerable 27% in the last month, which continues a horrid run for the company. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 86% loss during that time.
After such a large drop in price, Seres Therapeutics may be sending very bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.9x, since almost half of all companies in the Biotechs industry in the United States have P/S ratios greater than 15x and even P/S higher than 75x are not unusual. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so limited.
What Does Seres Therapeutics' P/S Mean For Shareholders?
With revenue growth that's superior to most other companies of late, Seres Therapeutics has been doing relatively well. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the share price, and thus the P/S ratio. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
Keen to find out how analysts think Seres Therapeutics' future stacks up against the industry? In that case, our free report is a great place to start.Do Revenue Forecasts Match The Low P/S Ratio?
There's an inherent assumption that a company should far underperform the industry for P/S ratios like Seres Therapeutics' to be considered reasonable.
Retrospectively, the last year delivered an explosive gain to the company's top line. The amazing performance means it was also able to grow revenue by 280% in total over the last three years. So we can start by confirming that the company has done a great job of growing revenue over that time.
Shifting to the future, estimates from the seven analysts covering the company suggest revenue growth is heading into negative territory, declining 25% each year over the next three years. Meanwhile, the broader industry is forecast to expand by 167% per annum, which paints a poor picture.
In light of this, it's understandable that Seres Therapeutics' P/S would sit below the majority of other companies. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.
The Final Word
Shares in Seres Therapeutics have plummeted and its P/S has followed suit. We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
As we suspected, our examination of Seres Therapeutics' analyst forecasts revealed that its outlook for shrinking revenue is contributing to its low P/S. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless there's material change, it's hard to envision a situation where the stock price will rise drastically.
You need to take note of risks, for example - Seres Therapeutics has 4 warning signs (and 1 which is a bit unpleasant) we think you should know about.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
Have 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.
令一些股東煩惱的是,Seres Therapeutics, Inc.(納斯達克股票代碼:MCRB)的股價在上個月下跌了27%,這延續了該公司的糟糕表現。對於股東來說,最近的下跌結束了災難性的十二個月,在此期間,股東虧損了86%。
在價格大幅下跌之後,Seres Therapeutics目前可能發出了非常看漲的信號,其市銷率(或 “市銷率”)爲0.9倍,因爲美國生物技術行業幾乎有一半公司的市盈率大於15倍,甚至市盈率高於75倍也並不少見。但是,僅按面值計算市銷率是不明智的,因爲可以解釋其爲何如此有限。
Seres Therapeutics的市銷率對股東意味着什麼?
由於最近的收入增長優於大多數其他公司,Seres Therapeutics的表現相對較好。許多人可能預計,強勁的收入表現將大幅下降,這抑制了股價,從而抑制了市銷率。如果不是,那麼現有股東就有理由對股價的未來走向非常樂觀。
想了解分析師如何看待Seres Therapeutics的未來與行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。收入預測與低市銷率相匹配嗎?
人們固有的假設是,如果像Seres Therapeutics這樣的市銷率被認爲是合理的,公司的表現應該遠遠低於該行業。
回顧過去,去年的公司收入實現了爆炸式增長。驚人的表現意味着它在過去三年中總收入增長了280%。因此,我們可以首先確認該公司在這段時間內在增加收入方面做得很好。
展望未來,報道該公司的七位分析師的估計表明,收入增長將進入負值區間,未來三年每年下降25%。同時,預計整個行業每年將增長167%,這描繪了一幅糟糕的景象。
有鑑於此,Seres Therapeutics的市銷率將低於其他多數公司是可以理解的。但是,尚不能保證市銷率已達到最低水平,收入反向增長。由於疲軟的前景壓低了股價,即使僅僅維持這些價格也可能難以實現。
最後一句話
Seres Therapeutics的股價暴跌,其市銷率也緊隨其後。我們可以說,市銷比率的力量主要不是作爲一種估值工具,而是用來衡量當前的投資者情緒和未來預期。
正如我們所懷疑的那樣,我們對Seres Therapeutics分析師預測的審查顯示,其收入萎縮的前景是其低市銷率的原因。目前,股東們正在接受低市銷率,因爲他們承認未來的收入可能不會帶來任何驚喜。除非發生實質性變化,否則很難想象股價會急劇上漲。
例如,你需要注意風險——Seres Therapeutics有4個警告信號(還有一個有點不愉快),我們認爲你應該知道。
重要的是要確保你尋找一家優秀的公司,而不僅僅是你遇到的第一個想法。因此,如果盈利能力的增長與你對一家優秀公司的想法一致,那就來看看這份免費名單吧,列出了最近收益增長強勁(市盈率低)的有趣公司。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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