Vohringer Home Technology Co.,Ltd.'s (SHSE:603226) price-to-sales (or "P/S") ratio of 4.4x may look like a poor investment opportunity when you consider close to half the companies in the Building industry in China have P/S ratios below 2x. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.
See our latest analysis for Vohringer Home TechnologyLtd
How Has Vohringer Home TechnologyLtd Performed Recently?
For instance, Vohringer Home TechnologyLtd's receding revenue in recent times would have to be some food for thought. It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/S from collapsing. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Vohringer Home TechnologyLtd will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The High P/S?
In order to justify its P/S ratio, Vohringer Home TechnologyLtd would need to produce outstanding growth that's well in excess of the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 24%. As a result, revenue from three years ago have also fallen 25% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Comparing that to the industry, which is predicted to deliver 26% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.
With this information, we find it concerning that Vohringer Home TechnologyLtd is trading at a P/S higher than the industry. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a very good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
The Bottom Line On Vohringer Home TechnologyLtd's P/S
While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
Our examination of Vohringer Home TechnologyLtd revealed its shrinking revenue over the medium-term isn't resulting in a P/S as low as we expected, given the industry is set to grow. When we see revenue heading backwards and underperforming the industry forecasts, we feel the possibility of the share price declining is very real, bringing the P/S back into the realm of reasonability. 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.
You always need to take note of risks, for example - Vohringer Home TechnologyLtd has 1 warning sign we think you should be aware of.
If these risks are making you reconsider your opinion on Vohringer Home TechnologyLtd, explore our interactive list of high quality stocks to get an idea of what else is out there.
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根據這些信息,我們發現Vohringer Home TechnologyLtd的市銷售率高於該行業。看來大多數投資者都忽視了最近的糟糕增長率,並希望公司的業務前景有所好轉。如果市銷率降至更符合近期負增長率的水平,現有股東很有可能爲未來的失望做好準備。
Vohringer Home TechnologyLtd 市銷率的底線
儘管市銷率不應該成爲決定你是否買入股票的決定性因素,但它是衡量收入預期的有力晴雨表。
我們對Vohringer Home TechnologyLtd的審查顯示,鑑於該行業即將增長,其中期收入萎縮並未導致市銷率低於我們的預期。當我們看到收入倒退且表現低於行業預測時,我們認爲股價下跌的可能性是真實存在的,這使市銷率回到了合理的境地。如果最近的中期收入趨勢持續下去,將對現有股東的投資構成重大風險,潛在投資者將很難接受股票的當前價值。
例如,你需要時刻注意風險——Vohringer Home TechnologyLtd有1個我們認爲你應該注意的警告標誌。
如果這些風險讓你重新考慮你對Vohringer Home TechnologyLtd的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。