What Dawson Geophysical Company's (NASDAQ:DWSN) 30% Share Price Gain Is Not Telling You
What Dawson Geophysical Company's (NASDAQ:DWSN) 30% Share Price Gain Is Not Telling You
Dawson Geophysical Company (NASDAQ:DWSN) shareholders are no doubt pleased to see that the share price has bounced 30% in the last month, although it is still struggling to make up recently lost ground. Looking further back, the 10% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.
Even after such a large jump in price, you could still be forgiven for feeling indifferent about Dawson Geophysical's P/S ratio of 0.5x, since the median price-to-sales (or "P/S") ratio for the Energy Services industry in the United States is also close to 1x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
What Does Dawson Geophysical's Recent Performance Look Like?
Dawson Geophysical certainly has been doing a great job lately as it's been growing its revenue at a really rapid pace. It might be that many expect the strong revenue performance to wane, which has kept the share price, and thus the P/S ratio, from rising. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.
Although there are no analyst estimates available for Dawson Geophysical, 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 P/S Ratio?
The only time you'd be comfortable seeing a P/S like Dawson Geophysical's is when the company's growth is tracking the industry closely.
Retrospectively, the last year delivered an exceptional 158% gain to the company's top line. As a result, it also grew revenue by 12% in total over the last three years. So we can start by confirming that the company has actually done a good job of growing revenue over that time.
This is in contrast to the rest of the industry, which is expected to grow by 12% over the next year, materially higher than the company's recent medium-term annualised growth rates.
With this information, we find it interesting that Dawson Geophysical is trading at a fairly similar P/S compared to the industry. Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now. Maintaining these prices will be difficult to achieve as a continuation of recent revenue trends is likely to weigh down the shares eventually.
What We Can Learn From Dawson Geophysical's P/S?
Its shares have lifted substantially and now Dawson Geophysical's P/S is back within range of the industry median. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
Our examination of Dawson Geophysical revealed its poor three-year revenue trends aren't resulting in a lower P/S as per our expectations, given they look worse than current industry outlook. Right now we are uncomfortable with the P/S as this revenue performance isn't likely to support a more positive sentiment for long. Unless the recent medium-term conditions improve, it's hard to accept the current share price as fair value.
Plus, you should also learn about these 3 warning signs we've spotted with Dawson Geophysical.
If these risks are making you reconsider your opinion on Dawson Geophysical, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
道森地球物理公司(納斯達克股票代碼:DWSN)的股東們無疑很高興看到股價在上個月反彈了30%,儘管該公司仍在努力彌補最近的跌勢。再往前看,儘管在過去的30天中表現強勁,但過去十二個月的10%漲幅還不錯。
即使在價格大幅上漲之後,你對道森地球物理公司0.5倍的市盈率漠不關心還是可以原諒的,因爲美國能源服務行業的中位數市銷率(或 “市盈率”)也接近1倍。但是,如果市銷率沒有合理的基礎,投資者可能會忽略明顯的機會或潛在的挫折。
道森地球物理最近的表現是什麼樣子?
道森地球物理最近確實做得很好,因爲它的收入增長非常快。許多人可能預計,強勁的收入表現將減弱,這阻礙了股價乃至市銷售率的上升。如果你喜歡這家公司,你希望情況並非如此,這樣你就有可能在它不太受青睞的情況下買入一些股票。
儘管沒有分析師對道森地球物理的估計,但請看一下這個數據豐富的免費可視化工具,看看該公司的收益、收入和現金流是如何積累的。收入預測與市銷率相匹配嗎?
你唯一能放心地看到像道森地球物理公司這樣的市銷率的時候是公司的增長密切關注行業的時候。
回顧過去,去年的公司收入實現了158%的驚人增長。結果,在過去三年中,它的總收入也增長了12%。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確實做得很好。
這與該行業其他部門形成鮮明對比,後者預計明年將增長12%,大大高於該公司最近的中期年化增長率。
有了這些信息,我們發現有趣的是,與行業相比,道森地球物理公司的市銷售率相當相似。顯然,該公司的許多投資者並不像最近所表明的那樣看跌,並且不願意立即放棄股票。維持這些價格將很難實現,因爲近期收入趨勢的延續最終可能會壓低股價。
我們可以從道森地球物理公司的市銷率中學到什麼?
其股價已大幅上漲,現在道森地球物理公司的市銷率已恢復在行業中位數範圍內。通常,在做出投資決策時,我們謹慎行事,不要過多地考慮市售比率,儘管這可以揭示其他市場參與者對公司的看法。
我們對道森地球物理的審查顯示,其糟糕的三年收入趨勢並未導致市銷率低於我們的預期,因爲這些趨勢看起來不如當前的行業前景。目前,我們對市銷率感到不舒服,因爲這種收入表現不太可能長期支持更積極的情緒。除非最近的中期狀況有所改善,否則很難接受當前股價的公允價值。
另外,你還應該了解我們在道森地球物理學中發現的這三個警告信號。
如果這些風險讓你重新考慮你對道森地球物理的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。
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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