Despite an already strong run, GME Group Holdings Limited (HKG:8188) shares have been powering on, with a gain of 26% in the last thirty days. Looking further back, the 19% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.
In spite of the firm bounce in price, there still wouldn't be many who think GME Group Holdings' price-to-sales (or "P/S") ratio of 0.2x is worth a mention when the median P/S in Hong Kong's Construction industry is similar at about 0.3x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
What Does GME Group Holdings' P/S Mean For Shareholders?
For instance, GME Group Holdings' receding revenue in recent times would have to be some food for thought. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. If you like the company, you'd at least be hoping this is the case so that you could potentially pick up some stock while it's not quite in favour.
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on GME Group Holdings' earnings, revenue and cash flow.
How Is GME Group Holdings' Revenue Growth Trending?
There's an inherent assumption that a company should be matching the industry for P/S ratios like GME Group Holdings' to be considered reasonable.
Retrospectively, the last year delivered a frustrating 12% decrease to the company's top line. Still, the latest three year period has seen an excellent 264% overall rise in revenue, in spite of its unsatisfying short-term performance. So we can start by confirming that the company has generally done a very good job of growing revenue over that time, even though it had some hiccups along the way.
This is in contrast to the rest of the industry, which is expected to grow by 13% over the next year, materially lower than the company's recent medium-term annualised growth rates.
In light of this, it's curious that GME Group Holdings' P/S sits in line with the majority of other companies. Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.
What Does GME Group Holdings' P/S Mean For Investors?
Its shares have lifted substantially and now GME Group Holdings' P/S is back within range of the industry median. 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.
To our surprise, GME Group Holdings revealed its three-year revenue trends aren't contributing to its P/S as much as we would have predicted, given they look better than current industry expectations. When we see strong revenue with faster-than-industry growth, we can only assume potential risks are what might be placing pressure on the P/S ratio. It appears some are indeed anticipating revenue instability, because the persistence of these recent medium-term conditions would normally provide a boost to the share price.
Before you take the next step, you should know about the 3 warning signs for GME Group Holdings (2 shouldn't be ignored!) that we have uncovered.
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).
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有鉴于此,奇怪的是,GME Group Holdings的市销率与其他多数公司持平。显然,一些股东认为最近的表现已达到极限,并一直在接受较低的销售价格。
GME集团控股的市销率对投资者意味着什么?
其股价已大幅上涨,现在GME Group Holdings的市销率已恢复在行业中位数范围内。有人认为,在某些行业中,市销率是衡量价值的较差指标,但它可以是一个有力的商业信心指标。
令我们惊讶的是,GME Group Holdings透露,其三年收入趋势对市销率的贡献没有我们预期的那么大,因为这些趋势看起来好于当前的行业预期。当我们看到强劲的收入和快于行业的增长速度时,我们只能假设潜在风险可能会给市销率带来压力。看来有些人确实在预测收入不稳定,因为近期这些中期状况的持续下去通常会提振股价。