You may think that with a price-to-sales (or "P/S") ratio of 0.9x SMART Global Holdings, Inc. (NASDAQ:SGH) is definitely a stock worth checking out, seeing as almost half of all the Semiconductor companies in the United States have P/S ratios greater than 4.2x and even P/S above 9x aren't out of the ordinary. 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 SMART Global Holdings
NasdaqGS:SGH Price to Sales Ratio vs Industry January 24th 2024
How Has SMART Global Holdings Performed Recently?
Recent times haven't been great for SMART Global Holdings as its revenue has been rising slower than most other companies. The P/S ratio is probably low because investors think this lacklustre revenue performance isn't going to get any better. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.
Want the full picture on analyst estimates for the company? Then our free report on SMART Global Holdings will help you uncover what's on the horizon.
Is There Any Revenue Growth Forecasted For SMART Global Holdings?
There's an inherent assumption that a company should far underperform the industry for P/S ratios like SMART Global Holdings' to be considered reasonable.
Retrospectively, the last year delivered virtually the same number to the company's top line as the year before. Fortunately, a few good years before that means that it was still able to grow revenue by 16% in total over the last three years. So it appears to us that the company has had a mixed result in terms of growing revenue over that time.
Turning to the outlook, the next year should bring diminished returns, with revenue decreasing 2.8% as estimated by the five analysts watching the company. Meanwhile, the broader industry is forecast to expand by 43%, which paints a poor picture.
In light of this, it's understandable that SMART Global Holdings' 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. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.
What Does SMART Global Holdings' P/S Mean For Investors?
While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
As we suspected, our examination of SMART Global Holdings' analyst forecasts revealed that its outlook for shrinking revenue is contributing to its low P/S. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless there's material change, it's hard to envision a situation where the stock price will rise drastically.
Having said that, be aware SMART Global Holdings is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored.
If these risks are making you reconsider your opinion on SMART Global Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.
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你可能会认为,SMART Global Holdings, Inc.(纳斯达克股票代码:SGH)的市销率(或 “市盈率”)为0.9倍,绝对是一只值得一看的股票,因为美国将近一半的半导体公司的市销率大于4.2倍,即使市盈率高于9倍也并非不寻常。但是,市销率可能很低是有原因的,需要进一步调查以确定其是否合理。
查看我们对 SMART 环球控股的最新分析
纳斯达克GS: 2024年1月24日与行业的股价销售比率
SMART Global Holdings最近的表现如何?
最近对SMART Global Holdings来说并不是一件好事,因为其收入的增长速度比大多数其他公司都要慢。市销率可能很低,因为投资者认为这种乏善可陈的收入表现不会好转。如果是这样的话,那么现有股东可能很难对股价的未来走向感到兴奋。
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预计SMART Global Holdings的收入会增长吗?
人们固有的假设是,如果像SMART Global Holdings这样的市销率被认为是合理的,公司的表现应该远远低于该行业。