What You Can Learn From Hangzhou Arcvideo Technology Co., Ltd.'s (SHSE:688039) P/SAfter Its 26% Share Price Crash
What You Can Learn From Hangzhou Arcvideo Technology Co., Ltd.'s (SHSE:688039) P/SAfter Its 26% Share Price Crash
Hangzhou Arcvideo Technology Co., Ltd. (SHSE:688039) shareholders won't be pleased to see that the share price has had a very rough month, dropping 26% and undoing the prior period's positive performance. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 44% share price drop.
In spite of the heavy fall in price, given around half the companies in China's Software industry have price-to-sales ratios (or "P/S") below 4.9x, you may still consider Hangzhou Arcvideo Technology as a stock to avoid entirely with its 8.8x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/S.
How Hangzhou Arcvideo Technology Has Been Performing
With revenue growth that's inferior to most other companies of late, Hangzhou Arcvideo Technology 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. However, if this isn't the case, investors might get caught out paying too much for the stock.
Want the full picture on analyst estimates for the company? Then our free report on Hangzhou Arcvideo Technology will help you uncover what's on the horizon.What Are Revenue Growth Metrics Telling Us About The High P/S?
Hangzhou Arcvideo Technology's P/S ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better 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 8.9% drop in revenue. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
Turning to the outlook, the next year should generate growth of 39% as estimated by the lone analyst watching the company. Meanwhile, the rest of the industry is forecast to only expand by 28%, which is noticeably less attractive.
In light of this, it's understandable that Hangzhou Arcvideo Technology's P/S sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Final Word
A significant share price dive has done very little to deflate Hangzhou Arcvideo Technology's very lofty P/S. 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 Hangzhou Arcvideo Technology'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.
You should always think about risks. Case in point, we've spotted 1 warning sign for Hangzhou Arcvideo Technology you should be aware of.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
杭州Arcvideo技術有限公司(SHSE: 688039)股東不會高興地看到股價經歷了一個非常艱難的月份,下跌了26%,抵消了前一時期的積極表現。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44%。
儘管價格大幅下跌,但鑑於中國軟件行業約有一半的公司的市銷比(或 “市銷率”)低於4.9倍,您仍然可以將杭州Arcvideo科技視爲完全避開的股票,其市銷率爲8.8倍。但是,我們需要更深入地挖掘,以確定市銷售率大幅上升是否有合理的依據。
杭州Arcvideo科技的表現如何
由於最近的收入增長不及大多數其他公司,杭州Arcvideo科技一直相對疲軟。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。但是,如果不是這樣,投資者可能會陷入爲股票支付過多費用的困境。
想全面了解分析師對公司的估計嗎?那麼我們關於杭州Arcvideo科技的免費報告將幫助您發現即將發生的事情。收入增長指標告訴我們高市銷率有哪些?
杭州Arcvideo Technology的市銷率對於一家預計將實現非常強勁的增長,而且重要的是,其表現要好於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8.9%,令人失望。因此,可以公平地說,最近的收入增長對公司來說是不可取的。
談到前景,根據關注該公司的唯一分析師的估計,明年將實現39%的增長。同時,預計該行業的其餘部分將僅增長28%,其吸引力明顯降低。
有鑑於此,杭州Arcvideo科技的市銷率高於其他多數公司是可以理解的。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
股價的大幅下跌對杭州Arcvideo Technology非常高的市銷率沒有起到什麼作用。我們可以說,市售比率的力量主要不是作爲估值工具,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,我們對杭州Arcvideo Technology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。
你應該時刻考慮風險。舉個例子,我們發現了你應該注意的杭州Arcvideo科技的1個警告信號。
如果你喜歡實力雄厚的公司盈利,那麼你會想看看這份以低市盈率(但已證明可以增加收益)的有趣公司的免費名單。
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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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