PDF Solutions, Inc.'s (NASDAQ:PDFS) Share Price Not Quite Adding Up
PDF Solutions, Inc.'s (NASDAQ:PDFS) Share Price Not Quite Adding Up
You may think that with a price-to-sales (or "P/S") ratio of 7.5x PDF Solutions, Inc. (NASDAQ:PDFS) is a stock to avoid completely, seeing as almost half of all the Semiconductor companies in the United States have P/S ratios under 4.2x and even P/S lower than 1.9x aren't out of the ordinary. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.
How PDF Solutions Has Been Performing
With revenue growth that's inferior to most other companies of late, PDF Solutions has been relatively sluggish. It might be that many expect the uninspiring revenue performance to recover significantly, which has kept the P/S ratio from collapsing. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Want the full picture on analyst estimates for the company? Then our free report on PDF Solutions will help you uncover what's on the horizon.Do Revenue Forecasts Match The High P/S Ratio?
The only time you'd be truly comfortable seeing a P/S as steep as PDF Solutions' is when the company's growth is on track to outshine the industry decidedly.
Retrospectively, the last year delivered a decent 12% gain to the company's revenues. Pleasingly, revenue has also lifted 88% in aggregate from three years ago, partly thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing revenues over that time.
Shifting to the future, estimates from the four analysts covering the company suggest revenue should grow by 10% over the next year. Meanwhile, the rest of the industry is forecast to expand by 44%, which is noticeably more attractive.
With this in consideration, we believe it doesn't make sense that PDF Solutions' P/S is outpacing its industry peers. Apparently many investors in the company are way more bullish than analysts indicate and aren't willing to let go of their stock at any price. There's a good chance these shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the growth outlook.
The Key Takeaway
Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.
It comes as a surprise to see PDF Solutions trade at such a high P/S given the revenue forecasts look less than stellar. When we see a weak revenue outlook, we suspect the share price faces a much greater risk of declining, bringing back down the P/S figures. Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.
And what about other risks? Every company has them, and we've spotted 2 warning signs for PDF Solutions you should know about.
If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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.
你可能會認爲,在市銷率(或 “市盈率”)爲7.5倍的情況下,PDF Solutions, Inc.(納斯達克股票代碼:PDFS)是一隻值得完全避開的股票,因爲美國幾乎有一半的半導體公司的市盈率低於4.2倍,即使市盈率低於1.9倍也並非不尋常。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之高。
PDF 解決方案的表現如何
由於最近的收入增長不及大多數其他公司,PDF Solutions一直相對疲軟。許多人可能預計,平淡無奇的收入表現將大幅恢復,這阻止了市銷率的暴跌。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想全面了解分析師對公司的估計嗎?然後,我們的免費PDF解決方案報告將幫助您發現即將發生的事情。收入預測與高市銷率相匹配嗎?
只有當公司的增長有望在行業中脫穎而出時,你才能真正放心地看到像PDF Solutions一樣高的市銷率。
回顧過去,去年的公司收入增長了12%。令人高興的是,總收入也比三年前增長了88%,這在一定程度上要歸功於過去12個月的增長。因此,我們可以首先確認該公司在此期間在增加收入方面做得很好。
展望未來,負責該公司的四位分析師的估計表明,明年收入將增長10%。同時,該行業的其他部門預計將增長44%,這明顯更具吸引力。
考慮到這一點,我們認爲PDF Solutions的市銷率超過業內同行是沒有意義的。顯然,該公司的許多投資者比分析師所表示的要看漲得多,他們不願意以任何價格拋售股票。如果市銷售率降至更符合增長前景的水平,這些股東很有可能爲未來的失望做好準備。
關鍵要點
通常,我們傾向於限制使用市銷率來確定市場對公司整體健康狀況的看法。
鑑於收入預測看起來不太理想,PDF Solutions以如此高的市銷率進行交易真是令人驚訝。當我們看到疲軟的收入前景時,我們懷疑股價面臨更大的下跌風險,從而使市銷售率回落。除非這些條件顯著改善,否則將這些價格視爲合理是非常困難的。
那其他風險呢?每家公司都有它們,我們發現了兩個你應該知道的 PDF 解決方案警告信號。
如果過去盈利增長穩健的公司處於困境,那麼你可能希望看到這些盈利增長強勁、市盈率低的其他公司的免費集合。
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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