You may think that with a price-to-sales (or "P/S") ratio of 1.1x Aecc Aero Science and Technology Co.,Ltd (SHSE:600391) is definitely a stock worth checking out, seeing as almost half of all the Aerospace & Defense companies in China have P/S ratios greater than 6.6x and even P/S above 11x aren't out of the ordinary. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so limited.
What Does Aecc Aero Science and TechnologyLtd's P/S Mean For Shareholders?
The revenue growth achieved at Aecc Aero Science and TechnologyLtd over the last year would be more than acceptable for most companies. One possibility is that the P/S is low because investors think this respectable revenue growth might actually underperform the broader industry in the near future. 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.
Although there are no analyst estimates available for Aecc Aero Science and 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 Aecc Aero Science and TechnologyLtd's Revenue Growth Trending?
The only time you'd be truly comfortable seeing a P/S as depressed as Aecc Aero Science and 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 grew revenue by an impressive 21% last year. The strong recent performance means it was also able to grow revenue by 54% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been superb for the company.
This is in contrast to the rest of the industry, which is expected to grow by 32% 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 Aecc Aero Science and 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.
The Key Takeaway
We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
As we suspected, our examination of Aecc Aero Science and TechnologyLtd revealed its three-year revenue trends are contributing to its low P/S, given they look worse than current industry expectations. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.
There are also other vital risk factors to consider and we've discovered 2 warning signs for Aecc Aero Science and TechnologyLtd (1 is potentially serious!) that you should be aware of before investing here.
If these risks are making you reconsider your opinion on Aecc Aero Science and TechnologyLtd, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
您可能认为,以Aecc Aero Science and Technology Co.,Ltd(SHSE:600391)的市销率为1.1x,几乎一半的中国航空航天/国防公司的市销率都大于6.6x,甚至超过11x的市销率也很正常,这绝对是值得检查的股票。但是,不能只看市销率,因为它限制如此之多,可能有其原因。
Aecc Aero Science and TechnologyLtd的市销率对股东意味着什么?
Aecc Aero Science and TechnologyLtd过去一年实现的营业收入增长对于大多数公司来说都是可接受的。可能的一种情况是,市销率低是因为投资者认为这种可观的营业收入增长实际上可能在不久的将来表现不及整个行业。如果您喜欢该公司,您希望这不是真的,这样您就可以在它不受欢迎的时候潜在地买一些股票。
虽然目前没有Aecc Aero Science and TechnologyLtd的分析师估计数据可用,但通过查看这个免费的数据丰富的可视化方案,可以了解该公司在收益、营业收入和现金流方面的状况如何。
Aecc Aero Science and TechnologyLtd的营业收入增长如何趋势?
只有当公司的增长按照预期滞后行业时,才能真正放心地看到Aecc Aero Science and TechnologyLtd的市销率这么低。