Investors Don't See Light At End Of Cara Therapeutics, Inc.'s (NASDAQ:CARA) Tunnel And Push Stock Down 26%
Investors Don't See Light At End Of Cara Therapeutics, Inc.'s (NASDAQ:CARA) Tunnel And Push Stock Down 26%
The Cara Therapeutics, Inc. (NASDAQ:CARA) share price has softened a substantial 26% over the previous 30 days, handing back much of the gains the stock has made lately. For any long-term shareholders, the last month ends a year to forget by locking in a 84% share price decline.
Since its price has dipped substantially, Cara Therapeutics may be sending buy signals at present with its price-to-sales (or "P/S") ratio of 1.7x, considering almost half of all companies in the Pharmaceuticals industry in the United States have P/S ratios greater than 2.8x and even P/S higher than 16x aren't out of the ordinary. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.
What Does Cara Therapeutics' P/S Mean For Shareholders?
While the industry has experienced revenue growth lately, Cara Therapeutics' revenue has gone into reverse gear, which is not great. Perhaps the P/S remains low as investors think the prospects of strong revenue growth aren't on the horizon. If you still like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
Keen to find out how analysts think Cara Therapeutics' future stacks up against the industry? In that case, our free report is a great place to start.Is There Any Revenue Growth Forecasted For Cara Therapeutics?
In order to justify its P/S ratio, Cara Therapeutics would need to produce sluggish growth that's trailing the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 50%. The last three years don't look nice either as the company has shrunk revenue by 84% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
Turning to the outlook, the next three years should bring diminished returns, with revenue decreasing 44% per annum as estimated by the five analysts watching the company. That's not great when the rest of the industry is expected to grow by 17% each year.
With this in consideration, we find it intriguing that Cara Therapeutics' P/S is closely matching its industry peers. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.
What Does Cara Therapeutics' P/S Mean For Investors?
The southerly movements of Cara Therapeutics' shares means its P/S is now sitting at a pretty low level. 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.
As we suspected, our examination of Cara Therapeutics' analyst forecasts revealed that its outlook for shrinking revenue is contributing to its low P/S. As other companies in the industry are forecasting revenue growth, Cara Therapeutics' poor outlook justifies its low P/S ratio. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.
And what about other risks? Every company has them, and we've spotted 3 warning signs for Cara Therapeutics you should know about.
Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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.
Cara Therapeutics, Inc.(納斯達克股票代碼:CARA)的股價在過去30天中大幅下跌了26%,收回了該股最近的大部分漲幅。對於任何長期股東來說,最後一個月的股價下跌幅度爲84%,從而結束了令人難忘的一年。
由於其價格大幅下跌,Cara Therapeutics目前可能正在發出買入信號,其市銷率(或 “市盈率”)爲1.7倍,因爲美國製藥行業幾乎有一半的公司的市銷率超過2.8倍,即使市盈率高於16倍也並非不尋常。但是,市銷率低可能是有原因的,需要進一步調查以確定其是否合理。
Cara Therapeutics的市銷率對股東意味着什麼?
儘管該行業最近經歷了收入增長,但Cara Therapeutics的收入卻倒退了,這並不理想。也許市銷率仍然很低,因爲投資者認爲強勁收入增長的前景尚未到來。如果你仍然喜歡這家公司,你希望情況並非如此,這樣你就有可能在它失寵的時候買入一些股票。
想了解分析師如何看待Cara Therapeutics的未來與行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。預計Cara Therapeutics的收入會增長嗎?
爲了證明其市銷率是合理的,Cara Therapeutics需要實現落後於該行業的緩慢增長。
在回顧去年的財務狀況時,看到該公司的收入下降至50%左右,我們感到沮喪。過去三年看起來也不太好,因爲該公司的總收入減少了84%。因此,不幸的是,我們必須承認,在這段時間內,該公司在增加收入方面做得不好。
展望來看,未來三年的回報應該會減少,根據關注該公司的五位分析師的估計,收入每年下降44%。當該行業的其他部門預計每年增長17%時,這並不好。
考慮到這一點,我們發現有趣的是,Cara Therapeutics的市銷率與業內同行非常接近。但是,尚不能保證市銷率已達到最低水平,收入反向增長。如果公司不改善營收增長,市銷率有可能降至更低的水平。
Cara Therapeutics的市銷率對投資者意味着什麼?
Cara Therapeutics股價向南走勢意味着其市銷率目前處於相當低的水平。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。
正如我們所懷疑的那樣,我們對Cara Therapeutics分析師預測的審查顯示,其收入萎縮的前景是其低市銷率的原因。由於業內其他公司預測收入增長,Cara Therapeutics的糟糕前景證明了其低市銷率是合理的。除非這些條件有所改善,否則它們將繼續構成股價在這些水平附近的障礙。
那其他風險呢?每家公司都有它們,我們已經發現了你應該知道的3個Cara Therapeutics警告信號。
當然,具有良好收益增長曆史的盈利公司通常是更安全的選擇。因此,您可能希望看到這些免費收集的市盈率合理且收益增長強勁的其他公司。
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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