Benign Growth For Beam Therapeutics Inc. (NASDAQ:BEAM) Underpins Stock's 30% Plummet
Benign Growth For Beam Therapeutics Inc. (NASDAQ:BEAM) Underpins Stock's 30% Plummet
Beam Therapeutics Inc. (NASDAQ:BEAM) shareholders won't be pleased to see that the share price has had a very rough month, dropping 30% 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 23% share price drop.
Since its price has dipped substantially, Beam Therapeutics' price-to-sales (or "P/S") ratio of 4.9x 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 13.4x and even P/S above 64x are quite common. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.
How Has Beam Therapeutics Performed Recently?
With revenue growth that's superior to most other companies of late, Beam Therapeutics has been doing relatively well. One possibility is that the P/S ratio is low because investors think this strong revenue performance might be less impressive moving forward. If you 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.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Beam Therapeutics.Do Revenue Forecasts Match The Low P/S Ratio?
Beam Therapeutics' 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. The amazing performance means it was also able to deliver huge revenue growth over the last three years. Therefore, it's fair to say the revenue growth recently has been superb for the company.
Shifting to the future, estimates from the analysts covering the company suggest revenue growth is heading into negative territory, declining 47% per year over the next three years. Meanwhile, the broader industry is forecast to expand by 160% per year, which paints a poor picture.
With this in consideration, we find it intriguing that Beam 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. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.
The Final Word
Having almost fallen off a cliff, Beam Therapeutics' share price has pulled its P/S way down as well. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
As we suspected, our examination of Beam 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, Beam 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.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Beam Therapeutics (at least 1 which shouldn't be ignored), and understanding these should be part of your investment process.
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.
Beam Therapeutics Inc.(納斯達克股票代碼:BEAM)的股東們不會很高興看到股價經歷了一個非常艱難的月份,下跌了30%,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23%。
由於其價格大幅下跌,Beam Therapeutics的市銷率(或 “市盈率”)爲4.9倍,與更廣泛的美國生物技術行業相比,目前可能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13.4倍,甚至市盈率高於64倍也很常見。但是,市銷率可能很低是有原因的,需要進一步調查以確定其是否合理。
Beam Therapeutics最近的表現如何?
Beam Therapeutics最近的收入增長優於大多數其他公司,因此表現相對較好。一種可能性是市銷率很低,因爲投資者認爲這種強勁的收入表現今後可能不那麼令人印象深刻。如果你喜歡這家公司,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。
如果你想了解分析師對未來的預測,你應該查看我們關於Beam Therapeutics的免費報告。收入預測與低市銷率相匹配嗎?
Beam Therapeutics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,就會發現該公司的收入呈指數級增長。驚人的表現意味着它還能夠在過去三年中實現巨大的收入增長。因此,可以公平地說,該公司最近的收入增長非常出色。
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47%。同時,預計整個行業每年將增長160%,這描繪了一幅糟糕的景象。
考慮到這一點,我們發現Beam Therapeutics的市銷率與業內同行非常接近,這很有趣。但是,尚不能保證市銷率已達到最低水平,收入反向增長。由於疲軟的前景壓低了股價,即使僅僅維持這些價格也可能難以實現。
最後一句話
Beam Therapeutics的股價幾乎跌下了懸崖,其市銷率也大幅下降。通常,在做出投資決策時,我們謹慎行事,不要過多地考慮市售比率,儘管這可以揭示其他市場參與者對公司的看法。
正如我們所懷疑的那樣,我們對Beam 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,Beam 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。
始終有必要考慮永遠存在的投資風險幽靈。我們已經確定了Beam Therapeutics的4個警告信號(至少有1個不容忽視),了解這些信號應該是您投資過程的一部分。
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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