TL Natural Gas Holdings Limited (HKG:8536) shares have had a horrible month, losing 27% after a relatively good period beforehand. Of course, over the longer-term many would still wish they owned shares as the stock's price has soared 155% in the last twelve months.
In spite of the heavy fall in price, given close to half the companies operating in Hong Kong's Specialty Retail industry have price-to-sales ratios (or "P/S") below 0.4x, you may still consider TL Natural Gas Holdings as a stock to potentially avoid with its 1.2x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/S.
How TL Natural Gas Holdings Has Been Performing
TL Natural Gas Holdings has been doing a good job lately as it's been growing revenue at a solid pace. Perhaps the market is expecting this decent revenue performance to beat out the industry over the near term, which has kept the P/S propped up. If not, then existing shareholders may be a little nervous about the viability of the share price.
Although there are no analyst estimates available for TL Natural Gas Holdings, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
How Is TL Natural Gas Holdings' Revenue Growth Trending?
There's an inherent assumption that a company should outperform the industry for P/S ratios like TL Natural Gas Holdings' to be considered reasonable.
Retrospectively, the last year delivered an exceptional 15% gain to the company's top line. The strong recent performance means it was also able to grow revenue by 53% in total over the last three years. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.
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 understandable that TL Natural Gas Holdings' P/S sits above the majority of other companies. It seems most investors are expecting this strong growth to continue and are willing to pay more for the stock.
The Final Word
Despite the recent share price weakness, TL Natural Gas Holdings' P/S remains higher than most other companies in the industry. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
As we suspected, our examination of TL Natural Gas Holdings revealed its three-year revenue trends are contributing to its high P/S, given they look better than current industry expectations. At this stage investors feel the potential continued revenue growth in the future is great enough to warrant an inflated P/S. If recent medium-term revenue trends continue, it's hard to see the share price falling strongly in the near future under these circumstances.
And what about other risks? Every company has them, and we've spotted 4 warning signs for TL Natural Gas Holdings (of which 1 is a bit unpleasant!) you should know about.
If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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.
TL Natural Gas Holdings Limited (HKG:8536)股票在经历了一段相对良好的时期后,最近一个月表现糟糕,下跌了27%。当然,在较长期内,很多人仍然希望拥有该股票,因为股价在过去十二个月中飙升了155%。
尽管股价大幅下跌,但由于香港专业零售行业近一半的公司市销率低于0.4倍,因此您可能仍会考虑避免购买TL Natural Gas Holdings的股票,因为其市销率为1.2倍。然而,我们需要深入挖掘一下,判断为什么市销率较高。
TL Natural Gas Holdings的业绩表现如何
最近,TL Natural Gas Holdings的营业收入以稳定的速度增长,做得不错。也许市场预计这种良好的营业表现将在近期超过整个行业,从而支撑市销率。如果没有实现这一点,那么现有股东可能会对股价的可行性感到有些紧张。
虽然没有关于TL Natural Gas Holdings的分析师预测可用,但请查看这个免费的数据丰富的可视化,了解公司在收益、营收和现金流方面的表现。
TL Natural Gas Holdings的营业收入增长如何?
一种固有的假设是,公司应该在市销率等方面优于行业,才能被认为是合理的,如同TL Natural Gas Holdings的情况。
回顾过去一年,TL Natural Gas Holdings的营业收入快速增长了15%。近期的强劲表现意味着,在过去三年中,总营业收入增长了53%。据此,股东肯定会欣然接受这些中期的营业收入增长率。
这与整个行业形成对比,预计未来一年增长13%,远低于该公司最近中期年化增长率。
考虑到这一点,可以理解为何TL Natural Gas Holdings的市销率高于大多数其他公司。看来,大多数投资者都预计这种强劲增长将继续,并愿意为该股付出更多的代价。
最终结论
尽管最近股价疲软,但TL Natural Gas Holdings的市销率仍高于行业内的大多数其他公司。通常情况下,在制定投资决策时,我们会警惕读取市销率过多的信息,尽管它可以揭示其他市场参与者对公司的看法。
正如我们所怀疑的那样,对TL Natural Gas Holdings的研究显示,其近三年的营收趋势有助于解释其较高的市销率,因为这些增长势头优于当前的行业预期。在这个阶段,投资者认为未来潜在的营收增长足以支撑炒高的市销率。如果最近的中期营收趋势持续下去,在这种情况下,很难看到股票价格在近期会大幅下跌。
那么其他风险呢?每个公司都有它们的风险,我们已经发现了TL Natural Gas Holdings的4个警告信号(其中1个有些令人不愉快!)。您应该了解这些风险。