Futong Technology Development Holdings Limited (HKG:465) shares have continued their recent momentum with a 27% gain in the last month alone. The annual gain comes to 107% following the latest surge, making investors sit up and take notice.
Following the firm bounce in price, when almost half of the companies in Hong Kong's Tech industry have price-to-sales ratios (or "P/S") below 0.4x, you may consider Futong Technology Development Holdings as a stock probably not worth researching with its 1x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's as high as it is.
SEHK:465 Price to Sales Ratio vs Industry June 17th 2024
How Has Futong Technology Development Holdings Performed Recently?
For example, consider that Futong Technology Development Holdings' financial performance has been poor lately as its revenue has been in decline. One possibility is that the P/S is high because investors think the company will still do enough to outperform the broader industry in the near future. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
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 Futong Technology Development Holdings' earnings, revenue and cash flow.
How Is Futong Technology Development Holdings' Revenue Growth Trending?
Futong Technology Development Holdings' P/S ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the industry.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 58%. The last three years don't look nice either as the company has shrunk revenue by 76% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
In contrast to the company, the rest of the industry is expected to grow by 20% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
With this in mind, we find it worrying that Futong Technology Development Holdings' P/S exceeds that of its industry peers. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh heavily on the share price eventually.
The Bottom Line On Futong Technology Development Holdings' P/S
Futong Technology Development Holdings' P/S is on the rise since its shares have risen strongly. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.
We've established that Futong Technology Development Holdings currently trades on a much higher than expected P/S since its recent revenues have been in decline over the medium-term. Right now we aren't comfortable with the high P/S as this revenue performance is highly unlikely to support such positive sentiment for long. Should recent medium-term revenue trends persist, it would pose a significant risk to existing shareholders' investments and prospective investors will have a hard time accepting the current value of the stock.
Before you settle on your opinion, we've discovered 3 warning signs for Futong Technology Development Holdings (2 make us uncomfortable!) 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Futong Technology Development Holdings Limited(HKG: 465)的股票在最近一个月内持续劲增,单月涨幅达27%。最近一次的暴涨使年度涨幅达到107%,引起了投资者的注意。
在价格反弹后,几乎一半的香港科技行业公司市销率(或“P/S”)低于0.4倍,因此,您可能认为Futong Technology Development Holdings的市销率高达1倍,可能不值得研究。但是,不明智地将市销率视为非黑即白,因为有可能存在解释为何市销率如此之高。
SEHK:465市销率与行业板块2024年6月17日对比
Futong Technology Development Holdings最近的表现如何?
例如,考虑到Futong Technology Development Holdings的财务表现最近一直很差,因为其营业收入一直在下降,所以市销率高可能是因为投资者认为该公司在不久的将来仍有可能表现足以跑赢更广泛的行业。真希望如此,否则您将为没有特定原因而支付的相当大的价格买单。我们没有分析师的预测,但是您可以查看我们在Futong Technology Development Holdings的收益、营收和现金流上的免费报告,了解最近的趋势对公司未来的建设如何。
我们没有分析师的预测,但是可以通过查看我们在Futong Technology Development Holdings的收益、营收和现金流上的免费报告来了解最近的趋势如何为公司未来做好铺垫。
Futong Technology Development Holdings的营收增长趋势如何?
Futong Technology Development Holdings的市销率对于一家有望实现稳健增长、并且有望表现比行业好的公司来说是典型的。
首先回顾一下Futong Technology Development Holdings去年的营收增长并不令人兴奋,因为公司的营收持续下降而令人失望,去年营收下降58%。过去三年看起来也不太好,因为公司总营收已经下降了76%。因此,不幸的是,我们不得不承认,该公司在增长营收方面表现不佳。相比之下,其他公司有望在未来一年内增长20%,这确实让公司最近中期的营收下降显得更加严重。
考虑到这一点,我们发现Futong Technology Development Holdings的市销率超过了同行业的同行。这似乎是因为大多数投资者并未关注最近的营收增长率,并希望公司的业务前景能够好转。只有最勇敢的人才会假定这些价格是可持续的,因为最近的营收趋势的延续很可能会给股价带来沉重的打击。
Futong Technology Development Holdings的市销率已经上升,因为其股票一直大涨。总的来说,我们更喜欢将市销率的使用范围限制在确立市场对公司总体健康状况看法方面。我们已经确定,由于Futong Technology Development Holdings的近期营收在中期内一直下降,因此其当前的市销率比预期高得多。眼下,我们对高市销率感到不安,因为营收表现高度不可能长期支撑如此积极的情绪。如果最近中期的营收趋势持续下去,将对现有股东的投资构成重大风险,同时拥有前景的投资者将难以接受股票的当前价值。
Futong Technology Development Holdings的市销率正在上升,因为其股票一直大涨。总的来说,我们更喜欢将市销率的使用范围限制在确立市场对公司总体健康状况看法方面。
在确认Futong Technology Development Holdings最近中期的营业收入一直下滑后,我们已经确定其目前的市销率高于预期。现在,我们对高市销率感到不安,因为这种营业收入表现高度不可能长期支撑如此积极的情绪。如果最近中期的营收趋势持续下去,将对现有股东的投资构成重大风险,同时拥有前景的投资者将难以接受股票的当前价值。一旦您考虑到季度和年度不稳定性、公司的财务状况、管理团队、竞争对手、投资风险等多方面因素,市销率便失去了作为单个度量工具的可靠性。
在确认Futong Technology Development Holdings最近中期的营业收入一直下滑后,我们已经确定其目前的市销率高于预期。现在,我们对高市销率感到不安,因为这种营业收入表现高度不可能长期支撑如此积极的情绪。如果最近中期的营收趋势持续下去,将对现有股东的投资构成重大风险,同时拥有前景的投资者将难以接受股票的当前价值。一旦您考虑到季度和年度不稳定性、公司的财务状况、管理团队、竞争对手、投资风险等多方面因素,市销率便失去了作为单个度量工具的可靠性。在您确定自己的看法之前,我们发现Futong Technology Development Holdings存在3个警告信号(其中2个让我们感到不安!),您必须知道。
在确认Futong Technology Development Holdings最近中期的营业收入一直下滑后,我们已经确定其目前的市销率高于预期。现在,我们对高市销率感到不安,因为这种营业收入表现高度不可能长期支撑如此积极的情绪。如果最近中期的营收趋势持续下去,将对现有股东的投资构成重大风险,同时拥有前景的投资者将难以接受股票的当前价值。一旦您考虑到季度和年度不稳定性、公司的财务状况、管理团队、竞争对手、投资风险等多方面因素,市销率便失去了作为单个度量工具的可靠性。在您确定自己的看法之前,请务必了解我们发现的Futong Technology Development Holdings存在3个警告信号(其中2个让我们感到不安!)。