Editas Medicine, Inc. (NASDAQ:EDIT) Looks Inexpensive After Falling 25% But Perhaps Not Attractive Enough
Editas Medicine, Inc. (NASDAQ:EDIT) Looks Inexpensive After Falling 25% But Perhaps Not Attractive Enough
To the annoyance of some shareholders, Editas Medicine, Inc. (NASDAQ:EDIT) shares are down a considerable 25% in the last month, which continues a horrid run for the company. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 27% share price drop.
Following the heavy fall in price, Editas Medicine's price-to-sales (or "P/S") ratio of 5.9x might make it look like a strong buy right now compared to the wider Biotechs industry in the United States, where around half of the companies have P/S ratios above 12.6x and even P/S above 63x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/S.
How Has Editas Medicine Performed Recently?
With revenue growth that's superior to most other companies of late, Editas Medicine has been doing relatively well. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the share price, and thus the P/S ratio. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Editas Medicine.How Is Editas Medicine's Revenue Growth Trending?
Editas Medicine's P/S ratio would be typical for a company that's expected to deliver very poor growth or even falling revenue, and importantly, perform much worse than the industry.
If we review the last year of revenue growth, we see the company's revenues grew exponentially. Despite this strong recent growth, it's still struggling to catch up as its three-year revenue frustratingly shrank by 14% overall. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
Shifting to the future, estimates from the analysts covering the company suggest revenue growth is heading into negative territory, declining 6.0% per year over the next three years. With the industry predicted to deliver 162% growth per year, that's a disappointing outcome.
In light of this, it's understandable that Editas Medicine's P/S would sit below the majority of other companies. 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.
The Bottom Line On Editas Medicine's P/S
Having almost fallen off a cliff, Editas Medicine's share price has pulled its P/S way down as well. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
With revenue forecasts that are inferior to the rest of the industry, it's no surprise that Editas Medicine's P/S is on the lower end of the spectrum. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. It's hard to see the share price rising strongly in the near future under these circumstances.
Don't forget that there may be other risks. For instance, we've identified 4 warning signs for Editas Medicine that you should be aware of.
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.
令一些股東煩惱的是,Editas Medicine, Inc.(納斯達克股票代碼:EDIT)的股價在上個月下跌了25%,這延續了該公司的糟糕表現。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27%。
在價格大幅下跌之後,與美國整個生物技術行業相比,Editas Medicine的5.9倍市銷率(或 “市銷率”)可能使其看起來像是一個強勁的買盤,在美國,大約一半的公司的市銷率高於12.6倍,甚至市盈率高於63倍也很常見。但是,我們需要更深入地挖掘,以確定大幅降低市銷率是否有合理的基礎。
Editas Medicine 最近表現如何?
由於收入增長近來優於大多數其他公司,Editas Medicine的表現相對較好。許多人可能預計,強勁的收入表現將大幅下降,這抑制了股價,從而抑制了市銷率。如果不是,那麼現有股東就有理由對股價的未來走向非常樂觀。
如果你想了解分析師對未來的預測,你應該查看我們關於Editas Medicine的免費報告。Editas Medicine 的收入增長趨勢如何?
Editas Medicine的市銷率對於一家預計增長非常糟糕甚至收入下降的公司來說是典型的,而且重要的是,其表現要比行業差得多。
如果我們回顧一下去年的收入增長,我們會看到該公司的收入呈指數級增長。儘管近期增長強勁,但由於其三年收入總體下降了14%,令人沮喪,它仍在努力迎頭趕上。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。
展望未來,報道該公司的分析師的估計表明,收入增長將進入負值區間,未來三年每年下降6.0%。預計該行業每年將實現162%的增長,這是一個令人失望的結果。
有鑑於此,可以理解Editas Medicine的市銷率將低於其他多數公司。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。
Editas Medicine 市銷率的底線
在差點跌下懸崖之後,Editas Medicine的股價也大幅下調了市銷率。僅使用市銷率來確定是否應該出售股票是不明智的,但它可以作爲公司未來前景的實用指南。
由於收入預測低於該行業的其他部門,因此Editas Medicine的市銷率處於較低水平也就不足爲奇了。在現階段,投資者認爲,收入改善的可能性不足以證明更高的市銷率是合理的。在這種情況下,很難看到股價在不久的將來強勁上漲。
別忘了可能還有其他風險。例如,我們已經確定了Editas Medicine的4個警告信號,你應該注意這些信號。
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。
風險及免責聲明
- 分享到weixin
- 分享到qq
- 分享到facebook
- 分享到twitter
- 分享到微博
- 粘贴板
使用瀏覽器的分享功能,分享給你的好友吧