Atlantic American Corporation (NASDAQ:AAME) Not Doing Enough For Some Investors As Its Shares Slump 30%
Atlantic American Corporation (NASDAQ:AAME) Not Doing Enough For Some Investors As Its Shares Slump 30%
Atlantic American Corporation (NASDAQ:AAME) shareholders that were waiting for something to happen have been dealt a blow with a 30% share price drop in the last month. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 17% share price drop.
Since its price has dipped substantially, when close to half the companies operating in the United States' Insurance industry have price-to-sales ratios (or "P/S") above 1x, you may consider Atlantic American as an enticing stock to check out with its 0.2x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.
How Has Atlantic American Performed Recently?
We'd have to say that with no tangible growth over the last year, Atlantic American's revenue has been unimpressive. One possibility is that the P/S is low because investors think this benign revenue growth rate will likely underperform the broader industry in the near future. If not, then existing shareholders may be feeling optimistic about the future direction of the share price.
Although there are no analyst estimates available for Atlantic American, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.Do Revenue Forecasts Match The Low P/S Ratio?
Atlantic American's P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the industry.
Retrospectively, the last year delivered virtually the same number to the company's top line as the year before. The lack of growth did nothing to help the company's aggregate three-year performance, which is an unsavory 4.4% drop in revenue. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
Comparing that to the industry, which is predicted to deliver 6.8% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.
With this information, we are not surprised that Atlantic American is trading at a P/S lower than the industry. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.
What Does Atlantic American's P/S Mean For Investors?
Atlantic American's P/S has taken a dip along with its share price. 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 Atlantic American revealed its shrinking revenue over the medium-term is contributing to its low P/S, given the industry is set to grow. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.
Don't forget that there may be other risks. For instance, we've identified 1 warning sign for Atlantic American that you should be aware of.
Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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.
上個月,由於股價下跌了30%,一直在等待事情發生的大西洋美國公司(納斯達克股票代碼:AAME)的股東受到了打擊。在過去十二個月中已經持股的股東沒有獲得回報,反而坐視股價下跌了17%。
由於其價格已大幅下跌,當將近一半在美國保險業運營的公司的市銷率(或 “市銷率”)高於1倍時,您可以將Atlantic American視爲具有0.2倍市銷率的誘人股票。但是,僅按面值計算市銷率是不明智的,因爲可以解釋其有限的原因。
《大西洋美國人》最近的表現如何?
我們不得不說,由於去年沒有切實的增長,美國大西洋航空的收入並不令人印象深刻。一種可能性是市銷率很低,因爲投資者認爲這種良性的收入增長率在不久的將來可能會低於整個行業。如果不是,那麼現有股東可能會對股價的未來走向感到樂觀。
儘管沒有分析師對Atlantic American的估計,但看看這個免費的數據豐富的可視化圖表,看看該公司的收益、收入和現金流是如何積累的。收入預測與低市銷率相匹配嗎?
Atlantic American的市銷率對於一家預計增長有限,而且重要的是表現不如行業的公司來說是典型的。
回顧過去,去年的公司收入與前一年幾乎相同。增長的缺乏對該公司的三年總體業績沒有任何幫助,收入下降了4.4%,令人失望。因此,不幸的是,我們必須承認,在這段時間內,該公司在增加收入方面做得不好。
相比之下,該行業預計將在未來12個月內實現6.8%的增長,根據最近的中期收入業績,該公司的下滑勢頭令人震驚。
有了這些信息,美國大西洋航空的市銷售率低於該行業也就不足爲奇了。但是,尚不能保證市銷率已達到最低水平,收入反向增長。如果公司不改善營收增長,市銷率有可能降至更低的水平。
美國大西洋航空的市銷率對投資者意味着什麼?
美國大西洋航空的市銷率與股價一起下跌。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,我們對美國大西洋航空的審查顯示,鑑於該行業即將增長,其中期收入萎縮是其低市銷售率的原因。在現階段,投資者認爲,收入改善的可能性不足以證明更高的市銷率是合理的。鑑於目前的情況,如果最近的中期收入趨勢持續下去,股價似乎不太可能在不久的將來雙向出現任何重大波動。
別忘了可能還有其他風險。例如,我們已經確定了美國大西洋航空的一個警告標誌,你應該注意這一點。
當然,具有良好收益增長曆史的盈利公司通常是更安全的選擇。因此,您可能希望看到這些免費收集的市盈率合理且收益增長強勁的其他公司。
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。
風險及免責聲明
- 分享到weixin
- 分享到qq
- 分享到facebook
- 分享到twitter
- 分享到微博
- 粘贴板
使用瀏覽器的分享功能,分享給你的好友吧