What Torrid Holdings Inc.'s (NYSE:CURV) 27% Share Price Gain Is Not Telling You
What Torrid Holdings Inc.'s (NYSE:CURV) 27% Share Price Gain Is Not Telling You
Those holding Torrid Holdings Inc. (NYSE:CURV) shares would be relieved that the share price has rebounded 27% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Looking further back, the 13% 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, there still wouldn't be many who think Torrid Holdings' price-to-sales (or "P/S") ratio of 0.4x is worth a mention when it essentially matches the median P/S in the United States' Specialty Retail industry. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
How Has Torrid Holdings Performed Recently?
Torrid Holdings could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. It might be that many expect the dour revenue performance to strengthen positively, which has kept the P/S from falling. However, if this isn't the case, investors might get caught out paying too much for the stock.
Keen to find out how analysts think Torrid Holdings' future stacks up against the industry? In that case, our free report is a great place to start.How Is Torrid Holdings' Revenue Growth Trending?
The only time you'd be comfortable seeing a P/S like Torrid Holdings' is when the company's growth is tracking the industry closely.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 10%. That put a dampener on the good run it was having over the longer-term as its three-year revenue growth is still a noteworthy 17% in total. So we can start by confirming that the company has generally done a good job of growing revenue over that time, even though it had some hiccups along the way.
Turning to the outlook, the next year should bring diminished returns, with revenue decreasing 0.6% as estimated by the six analysts watching the company. That's not great when the rest of the industry is expected to grow by 3.7%.
With this information, we find it concerning that Torrid Holdings is trading at a fairly similar P/S compared to the industry. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. Only the boldest would assume these prices are sustainable as these declining revenues are likely to weigh on the share price eventually.
What We Can Learn From Torrid Holdings' P/S?
Torrid Holdings' stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. 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.
Our check of Torrid Holdings' analyst forecasts revealed that its outlook for shrinking revenue isn't bringing down its P/S as much as we would have predicted. When we see a gloomy outlook like this, our immediate thoughts are that the share price is at risk of declining, negatively impacting P/S. If the poor revenue outlook tells us one thing, it's that these current price levels could be unsustainable.
Plus, you should also learn about these 4 warning signs we've spotted with Torrid Holdings (including 2 which can't be ignored).
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.
那些持有Torrid Holdings Inc.(紐約證券交易所代碼:CURV)股票的人會鬆一口氣,因爲股價在過去三十天中反彈了27%,但它需要繼續修復最近對投資者投資組合造成的損失。再往前看,儘管在過去的30天中表現強勁,但過去十二個月中13%的漲幅還不錯。
即使在價格大幅上漲之後,仍然沒有多少人認爲Torrid Holdings的0.4倍市銷率(或 “市盈率”)值得一提,因爲它與美國專業零售行業的市盈率中位數基本相當。但是,不加解釋地忽略市銷率是不明智的,因爲投資者可能會忽視一個明顯的機會或一個代價高昂的錯誤。
Torrid Holdings最近的表現如何?
Torrid Holdings可能會做得更好,因爲其收入最近一直在倒退,而大多數其他公司的收入卻出現了正增長。許多人可能預計,糟糕的收入表現將積極增強,這使市銷售率沒有下降。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。
想了解分析師如何看待Torrid Holdings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。Torrid Holdings的收入增長趨勢如何?
你唯一能放心地看到像Torrid Holdings這樣的市銷率的時候是公司的增長密切關注行業的時候。
在回顧去年的財務狀況時,我們沮喪地看到該公司的收入下降至10%左右。這抑制了其長期的良好表現,因爲其三年總收入增長仍爲17%,值得注意的是。因此,我們可以首先確認該公司在此期間在增加收入方面總體上做得很好,儘管在此過程中遇到了一些小問題。
談到前景,明年的回報應該會減少,根據關注該公司的六位分析師的估計,收入將下降0.6%。當該行業其他部門預計將增長3.7%時,情況就不太好了。
有了這些信息,我們發現Torrid Holdings的交易市銷率與該行業相似。看來大多數投資者都希望公司的業務前景出現轉機,但分析師對這種情況會發生的信心不大。只有最大膽的人才會假設這些價格是可持續的,因爲這些收入的下降最終可能會壓制股價。
我們可以從Torrid Holdings的市銷率中學到什麼?
Torrid Holdings的股票最近勢頭強勁,這使其市銷率與業內其他公司相比有所上升。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。
我們對Torrid Holdings分析師預測的檢查顯示,其收入萎縮的前景並沒有像我們預期的那樣降低市銷售率。當我們看到這樣的悲觀前景時,我們立即想到的是股價有下跌的風險,對市銷率產生負面影響。如果糟糕的收入前景告訴我們一件事,那就是當前的價格水平可能是不可持續的。
另外,你還應該了解我們在Torrid Holdings發現的這4個警告信號(包括兩個不容忽視的警告)。
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?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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