Arctech Solar Holding Co., Ltd. (SHSE:688408) shareholders would be excited to see that the share price has had a great month, posting a 31% gain and recovering from prior weakness. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 22% in the last twelve months.
In spite of the firm bounce in price, it's still not a stretch to say that Arctech Solar Holding's price-to-sales (or "P/S") ratio of 2.3x right now seems quite "middle-of-the-road" compared to the Electrical industry in China, where the median P/S ratio is around 2.2x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
View our latest analysis for Arctech Solar Holding
What Does Arctech Solar Holding's Recent Performance Look Like?
Recent times have been advantageous for Arctech Solar Holding as its revenues have been rising faster than most other companies. One possibility is that the P/S ratio is moderate because investors think this strong revenue performance might be about to tail off. If the company manages to stay the course, then investors should be rewarded with a share price that matches its revenue figures.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Arctech Solar Holding.
How Is Arctech Solar Holding's Revenue Growth Trending?
Arctech Solar Holding's P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.
Taking a look back first, we see that the company grew revenue by an impressive 64% last year. The latest three year period has also seen an excellent 71% 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.
Shifting to the future, estimates from the three analysts covering the company suggest revenue should grow by 38% per year over the next three years. With the industry only predicted to deliver 19% per annum, the company is positioned for a stronger revenue result.
With this information, we find it interesting that Arctech Solar Holding is trading at a fairly similar P/S compared to the industry. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.
The Key Takeaway
Arctech Solar Holding appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in the industry 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.
Despite enticing revenue growth figures that outpace the industry, Arctech Solar Holding's P/S isn't quite what we'd expect. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. This uncertainty seems to be reflected in the share price which, while stable, could be higher given the revenue forecasts.
Don't forget that there may be other risks. For instance, we've identified 2 warning signs for Arctech Solar Holding 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.
Arctech Solar 控股有限公司(上海证券交易所代码:688408)股东们会很高兴看到股价经历了一个不错的月份,涨幅为31%,并从先前的疲软中恢复过来。并非所有股东都会感到欢欣鼓舞,因为股价在过去十二个月中仍然下跌了令人失望的22%。
尽管价格出现了大幅反弹,但与中国的电气行业相比,Arctech Solar Holding目前的2.3倍市销率(或 “市销率”)似乎相当 “处于中间位置”,中国的电气行业市销率中位数约为2.2倍,可以毫不夸张地说。尽管这可能不会引起任何关注,但如果市销率不合理,投资者可能会错过潜在的机会或无视迫在眉睫的失望情绪。
查看我们对Arctech太阳能控股公司的最新分析
Arctech Solar Holding最近的表现如何?
最近对Arctech Solar Holding来说是有利的,因为其收入的增长速度快于大多数其他公司。一种可能性是市销率适中,因为投资者认为这种强劲的收入表现可能即将结束。如果公司设法坚持下去,那么投资者应该获得与其收入数字相匹配的股价作为奖励。
如果你想了解分析师对未来的预测,你应该查看我们关于Arctech Solar Holding的免费报告。
Arctech Solar Holding的收入增长趋势如何?
Arctech Solar Holding的市销率对于一家预计只会实现适度增长且重要的是表现与行业持平的公司来说是典型的。