HCI Group, Inc.'s (NYSE:HCI) price-to-sales (or "P/S") ratio of 1.7x may not look like an appealing investment opportunity when you consider close to half the companies in the Insurance industry in the United States have P/S ratios below 1.1x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/S.
NYSE:HCI Price to Sales Ratio vs Industry May 10th 2024
What Does HCI Group's Recent Performance Look Like?
Recent times have been advantageous for HCI Group as its revenues have been rising faster than most other companies. The P/S is probably high because investors think this strong revenue performance will continue. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Keen to find out how analysts think HCI Group's future stacks up against the industry? In that case, our free report is a great place to start.
How Is HCI Group's Revenue Growth Trending?
In order to justify its P/S ratio, HCI Group would need to produce impressive growth in excess of the industry.
Taking a look back first, we see that the company grew revenue by an impressive 28% last year. The latest three year period has also seen an excellent 104% overall rise in revenue, aided by its short-term performance. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.
Turning to the outlook, the next year should generate growth of 25% as estimated by the four analysts watching the company. That's shaping up to be materially higher than the 6.2% growth forecast for the broader industry.
With this in mind, it's not hard to understand why HCI Group's P/S is high relative to its industry peers. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Final Word
It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
As we suspected, our examination of HCI Group's analyst forecasts revealed that its superior revenue outlook is contributing to its high P/S. Right now shareholders are comfortable with the P/S as they are quite confident future revenues aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.
We don't want to rain on the parade too much, but we did also find 2 warning signs for HCI Group that you need to be mindful of.
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.
當您考慮到近一半的保險行業公司時,HCI Group, Inc.(紐約證券交易所代碼:HCI)1.7倍的市銷率(或“P/S”)可能看起來並不是一個有吸引力的投資機會。 美國的市盈率低於 1.1 倍。但是,我們需要更深入地挖掘,以確定市銷率上升是否有合理的基礎。
紐約證券交易所:HCI 與行業的股價銷售比率 2024 年 5 月 10 日
HCI 集團最近的表現是什麼樣子?
最近對HCI集團來說是有利的,因爲其收入的增長速度快於大多數其他公司。市銷率可能很高,因爲投資者認爲這種強勁的收入表現將繼續下去。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想了解分析師如何看待HCI集團的未來與該行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。
HCI 集團的收入增長趨勢如何?
爲了證明其市銷率是合理的,HCI集團需要實現超過該行業的驚人增長。
首先回顧一下,我們發現該公司去年的收入增長了令人印象深刻的28%。在短期表現的推動下,最近三年的總體收入也實現了104%的出色增長。因此,股東們肯定會對這些中期收入增長率表示歡迎。
談到前景,根據關注該公司的四位分析師的估計,明年將實現25%的增長。這將大大高於整個行業6.2%的增長預期。
考慮到這一點,不難理解爲何HCI集團的市銷率高於同行。顯然,股東們並不熱衷於轉移可能着眼於更繁榮未來的東西。
最後一句話
有人認爲,在某些行業中,市銷率是衡量價值的較差指標,但它可以是一個有力的商業信心指標。
正如我們所懷疑的那樣,我們對HCI集團分析師預測的審查顯示,其優異的收入前景是其高市銷率的原因。目前,股東們對市盈率感到滿意,因爲他們非常有信心未來的收入不會受到威脅。在這種情況下,很難看到股價在不久的將來會強勁下跌。
我們不想在遊行隊伍中下太多雨,但我們也發現了 HCI 集團需要注意的兩個警告信號。
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?對內容感到擔憂嗎?請直接聯繫我們。或者,也可以發送電子郵件至編輯團隊 (at) simplywallst.com。
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。