Eastone Century Technology Co.,Ltd. (SZSE:300310) shareholders that were waiting for something to happen have been dealt a blow with a 32% share price drop in the last month. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 25% in that time.
In spite of the heavy fall in price, Eastone Century TechnologyLtd may still be sending very bullish signals at the moment with its price-to-sales (or "P/S") ratio of 1x, since almost half of all companies in the IT industry in China have P/S ratios greater than 3.3x and even P/S higher than 6x are not unusual. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.
SZSE:300310 Price to Sales Ratio vs Industry February 5th 2024
What Does Eastone Century TechnologyLtd's Recent Performance Look Like?
Revenue has risen at a steady rate over the last year for Eastone Century TechnologyLtd, which is generally not a bad outcome. Perhaps the market believes the recent revenue performance might fall short of industry figures in the near future, leading to a reduced P/S. Those who are bullish on Eastone Century TechnologyLtd will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.
Although there are no analyst estimates available for Eastone Century TechnologyLtd, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
How Is Eastone Century TechnologyLtd's Revenue Growth Trending?
The only time you'd be truly comfortable seeing a P/S as depressed as Eastone Century TechnologyLtd's is when the company's growth is on track to lag the industry decidedly.
Taking a look back first, we see that the company managed to grow revenues by a handy 3.0% last year. The latest three year period has also seen a 14% overall rise in revenue, aided somewhat by its short-term performance. Therefore, it's fair to say the revenue growth recently has been respectable for the company.
This is in contrast to the rest of the industry, which is expected to grow by 44% over the next year, materially higher than the company's recent medium-term annualised growth rates.
With this in consideration, it's easy to understand why Eastone Century TechnologyLtd's P/S falls short of the mark set by its industry peers. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the wider industry.
What We Can Learn From Eastone Century TechnologyLtd's P/S?
Having almost fallen off a cliff, Eastone Century TechnologyLtd'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.
As we suspected, our examination of Eastone Century TechnologyLtd revealed its three-year revenue trends are contributing to its low P/S, given they look worse than current industry expectations. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. If recent medium-term revenue trends continue, it's hard to see the share price experience a reversal of fortunes anytime soon.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Eastone Century TechnologyLtd, and understanding them should be part of your investment process.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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.
尽管价格大幅下跌，但Eastone Century TechnologyLtd目前可能仍在发出非常看涨的信号，其市销率（或 “市盈率”）为1倍，因为中国IT行业几乎有一半的公司市盈率大于3.3倍，甚至市盈率高于6倍的情况并不少见。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。
SZSE: 300310 对比行业的市销比率 2024 年 2 月 5 日
东通世纪科技有限公司最近的表现如何？
去年，Eastone Century TechnologyLtd的收入稳步增长，这通常不是一个坏结果。也许市场认为，近期收入表现可能在不久的将来低于行业数据，从而导致市销率下降。那些看好Eastone Century TechnologyLtd的人会希望情况并非如此，这样他们就可以以较低的估值买入该股。
尽管没有分析师对Eastone Century TechnologyLtd的估计，但看看这个免费的数据丰富的可视化图表，看看该公司如何积累收益、收入和现金流。
东通世纪科技有限公司的收入增长趋势如何？
只有当公司的增长有望明显落后于该行业时，你才能真正放心地看到像Eastone Century TechnologyLtd一样低迷的市销率。
考虑到这一点，不难理解Eastone Century TechnologyLtd的市销率为何未达到业内同行设定的水平。显然，许多股东不愿意坚持他们认为将继续落后于整个行业的东西。
我们可以从Eastone Century TechnologyLtd的市销率中学到什么？
在差点跌下悬崖之后，Eastone Century TechnologyLtd的股价也大幅下调了市销率。仅使用市销率来确定是否应该出售股票是不明智的，但它可以作为公司未来前景的实用指南。
正如我们所怀疑的那样，我们对Eastone Century TechnologyLtd的审查显示，其三年收入趋势是其低市销售率的原因，因为这些趋势看起来不如当前的行业预期。目前，股东们正在接受低市销率，因为他们承认未来的收入可能不会带来任何惊喜。如果最近的中期收入趋势继续下去，就很难看到股价在短期内出现命运逆转。
始终有必要考虑永远存在的投资风险幽灵。我们已经向Eastone Century TechnologyLtd确定了3个警告信号，了解它们应该是您投资过程的一部分。
The only time you'd be truly comfortable seeing a P/S as depressed as Eastone Century TechnologyLtd's is when the company's growth is on track to lag the industry decidedly. 
只有当公司的增长有望明显落后于该行业时，你才能真正放心地看到像Eastone Century TechnologyLtd一样低迷的市销率。 