Those holding Peiport Holdings Ltd. (HKG:2885) shares would be relieved that the share price has rebounded 25% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. The last 30 days bring the annual gain to a very sharp 38%.
Even after such a large jump in price, there still wouldn't be many who think Peiport Holdings' price-to-sales (or "P/S") ratio of 0.7x is worth a mention when the median P/S in Hong Kong's Electronic industry is similar at about 0.4x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
How Peiport Holdings Has Been Performing
The revenue growth achieved at Peiport Holdings over the last year would be more than acceptable for most companies. It might be that many expect the respectable revenue performance to wane, which has kept the P/S from rising. If that doesn't eventuate, then existing shareholders probably aren't too pessimistic about the future direction of the share price.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Peiport Holdings will help you shine a light on its historical performance.
How Is Peiport Holdings' Revenue Growth Trending?
The only time you'd be comfortable seeing a P/S like Peiport Holdings' is when the company's growth is tracking the industry closely.
Taking a look back first, we see that the company managed to grow revenues by a handy 7.5% last year. Still, lamentably revenue has fallen 9.1% in aggregate from three years ago, which is disappointing. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
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.
In light of this, it's somewhat alarming that Peiport Holdings' P/S sits in line with the majority of other companies. Apparently many investors in the company are way less bearish than recent times would indicate and aren't willing to let go of their stock right now. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh on the share price eventually.
The Final Word
Peiport Holdings appears to be back in favour with a solid price jump bringing its P/S back in line with 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.
Our look at Peiport Holdings revealed its shrinking revenues over the medium-term haven't impacted the P/S as much as we anticipated, given the industry is set to grow. Even though it matches the industry, we're uncomfortable with the current P/S ratio, as this dismal revenue performance is unlikely to support a more positive sentiment for long. Unless the recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
Before you take the next step, you should know about the 2 warning signs for Peiport Holdings (1 is a bit concerning!) that we have uncovered.
If these risks are making you reconsider your opinion on Peiport Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.
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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。