Sky Blue 11 Company Limited (HKG:1010) shareholders that were waiting for something to happen have been dealt a blow with a 33% share price drop in the last month. For any long-term shareholders, the last month ends a year to forget by locking in a 60% share price decline.
In spite of the heavy fall in price, it's still not a stretch to say that Sky Blue 11's price-to-sales (or "P/S") ratio of 1.3x right now seems quite "middle-of-the-road" compared to the Semiconductor industry in Hong Kong, where the median P/S ratio is around 1x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
How Sky Blue 11 Has Been Performing
As an illustration, revenue has deteriorated at Sky Blue 11 over the last year, which is not ideal at all. Perhaps investors believe the recent revenue performance is enough to keep in line with the industry, which is keeping the P/S from dropping off. 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 Sky Blue 11's earnings, revenue and cash flow.
Is There Some Revenue Growth Forecasted For Sky Blue 11?
There's an inherent assumption that a company should be matching the industry for P/S ratios like Sky Blue 11's to be considered reasonable.
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 37%. This has soured the latest three-year period, which nevertheless managed to deliver a decent 23% overall rise in revenue. Although it's been a bumpy ride, it's still fair to say the revenue growth recently has been mostly respectable for the company.
This is in contrast to the rest of the industry, which is expected to grow by 17% over the next year, materially higher than the company's recent medium-term annualised growth rates.
With this information, we find it interesting that Sky Blue 11 is trading at a fairly similar P/S compared to the industry. Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now. They may be setting themselves up for future disappointment if the P/S falls to levels more in line with recent growth rates.
What Does Sky Blue 11's P/S Mean For Investors?
With its share price dropping off a cliff, the P/S for Sky Blue 11 looks to be in line with the rest of the Semiconductor 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.
We've established that Sky Blue 11's average P/S is a bit surprising since its recent three-year growth is lower than the wider industry forecast. Right now we are uncomfortable with the P/S as this revenue performance isn't likely to support a more positive sentiment for long. Unless the recent medium-term conditions improve, it's hard to accept the current share price as fair value.
Plus, you should also learn about these 4 warning signs we've spotted with Sky Blue 11 (including 2 which are a bit unpleasant).
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
Sky Blue 11有限公司(港股:1010)的股东们一直在等待着一些事情发生,但在过去一个月里,股价下跌了33%。对于任何长期股东来说,过去一个月标志着一个需要遗忘的年份,因为股价下跌了60%。
尽管股价大幅下跌,但可以说Sky Blue 11的市销率(或称"P/S")目前为1.3倍,与香港半导体行业相比仍然属于"中等水平",香港半导体行业的中位数P/S比率约为1倍。尽管如此,仅仅忽视市销率而没有解释是不明智的,因为投资者可能正在忽视一个独特的机会或一个代价高昂的错误。
Sky Blue 11的表现如何
以Sky Blue 11为例,营业收入在过去一年里有所下滑,这并不理想。也许投资者认为最近的营业收入表现足以与行业保持一致,这阻止了市销率的下降。如果你喜欢这家公司,至少希望这样,这样你就有可能在股价不太受宠时买入一些股票。
我们没有分析师的预测,但你可以通过查阅我们关于Sky Blue 11的收益、营业收入和现金流的免费报告来了解最近的趋势如何为该公司的未来做好准备。