Unfortunately for some shareholders, the Cenntro Electric Group Limited (NASDAQ:CENN) share price has dived 35% in the last thirty days, prolonging recent pain. For any long-term shareholders, the last month ends a year to forget by locking in a 64% share price decline.
After such a large drop in price, Cenntro Electric Group's price-to-sales (or "P/S") ratio of 2.6x might make it look like a strong buy right now compared to the wider Auto industry in the United States, where around half of the companies have P/S ratios above 5.2x and even P/S above 13x 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.
View our latest analysis for Cenntro Electric Group
What Does Cenntro Electric Group's P/S Mean For Shareholders?
Recent times have been quite advantageous for Cenntro Electric Group as its revenue has been rising very briskly. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the P/S ratio. 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.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Cenntro Electric Group will help you shine a light on its historical performance.
Do Revenue Forecasts Match The Low P/S Ratio?
Cenntro Electric Group'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, the company posted a terrific increase of 50%. The latest three year period has also seen an excellent 180% overall rise in revenue, aided by its short-term performance. Therefore, it's fair to say the revenue growth recently has been superb for the company.
Comparing that recent medium-term revenue trajectory with the industry's one-year growth forecast of 31% shows it's noticeably more attractive.
With this information, we find it odd that Cenntro Electric Group is trading at a P/S lower than the industry. It looks like most investors are not convinced the company can maintain its recent growth rates.
The Final Word
Having almost fallen off a cliff, Cenntro Electric Group's share price has pulled its P/S way down as well. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We're very surprised to see Cenntro Electric Group currently trading on a much lower than expected P/S since its recent three-year growth is higher than the wider industry forecast. When we see strong revenue with faster-than-industry growth, we assume there are some significant underlying risks to the company's ability to make money which is applying downwards pressure on the P/S ratio. While recent revenue trends over the past medium-term suggest that the risk of a price decline is low, investors appear to perceive a likelihood of revenue fluctuations in the future.
Before you take the next step, you should know about the 5 warning signs for Cenntro Electric Group (2 are potentially serious!) that we have uncovered.
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.
在价格大幅下跌之后,与整个美国汽车行业相比,Centro Electric Group的2.6倍市盈率(或 “市盈率”)可能使其目前看起来像是一个强劲的买盘。在美国,大约有一半的公司的市盈率超过5.2倍,甚至市盈率也高于13倍也很常见。但是,市盈率很低可能是有原因的,需要进一步调查才能确定其是否合理。
查看我们对 Centro Electric Group 的最新分析
中创电气集团的市盈率对股东意味着什么?
最近对Centro Electric Group来说非常有利,因为其收入增长非常迅速。许多人可能预计强劲的收入表现将大幅下降,这抑制了市盈率。如果你喜欢这家公司,你会希望情况并非如此,这样你就有可能在失宠的时候买入一些股票。
想全面了解公司的收益、收入和现金流吗?然后,我们关于Centro Electric Group的免费报告将帮助您了解其历史表现。
收入预测是否与低市盈率相符?
Centro Electric Group的市盈率对于一家预计增长非常糟糕甚至收入下降的公司来说是典型的,更重要的是,其表现要比行业差得多。
有了这些信息,我们觉得奇怪的是,Centro Electric Group的市盈率低于该行业。看来大多数投资者不相信该公司能够维持其最近的增长率。
最后一句话
Centro Electric Group的股价几乎跌下了悬崖,其市盈率也大幅下降。有人认为,在某些行业中,价格与销售比率是衡量价值的次要指标,但它可能是一个有力的商业情绪指标。
我们非常惊讶地看到,Centro Electric Group目前的市盈率远低于预期,因为其最近的三年增长高于整个行业的预期。当我们看到强劲的收入和快于行业的增长时,我们假设公司的盈利能力存在一些重大的潜在风险,这给市盈率带来了下行压力。尽管最近中期的收入趋势表明价格下跌的风险很低,但投资者似乎意识到未来收入可能出现波动。
在采取下一步行动之前,你应该了解Centro Electric Group的5个警告信号(其中2个可能很严重!)我们已经发现了。