Arctech Solar Holding Co., Ltd. (SHSE:688408) shareholders would be excited to see that the share price has had a great month, posting a 31% gain and recovering from prior weakness. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 22% in the last twelve months.
In spite of the firm bounce in price, it's still not a stretch to say that Arctech Solar Holding's price-to-sales (or "P/S") ratio of 2.3x right now seems quite "middle-of-the-road" compared to the Electrical industry in China, where the median P/S ratio is around 2.2x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
View our latest analysis for Arctech Solar Holding
What Does Arctech Solar Holding's Recent Performance Look Like?
Recent times have been advantageous for Arctech Solar Holding as its revenues have been rising faster than most other companies. One possibility is that the P/S ratio is moderate because investors think this strong revenue performance might be about to tail off. If the company manages to stay the course, then investors should be rewarded with a share price that matches its revenue figures.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Arctech Solar Holding.
How Is Arctech Solar Holding's Revenue Growth Trending?
Arctech Solar Holding's P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.
Taking a look back first, we see that the company grew revenue by an impressive 64% last year. The latest three year period has also seen an excellent 71% overall rise in revenue, aided by its short-term performance. Therefore, it's fair to say the revenue growth recently has been superb for the company.
Shifting to the future, estimates from the three analysts covering the company suggest revenue should grow by 38% per year over the next three years. With the industry only predicted to deliver 19% per annum, the company is positioned for a stronger revenue result.
With this information, we find it interesting that Arctech Solar Holding is trading at a fairly similar P/S compared to the industry. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.
The Key Takeaway
Arctech Solar Holding appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in the industry It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
Despite enticing revenue growth figures that outpace the industry, Arctech Solar Holding's P/S isn't quite what we'd expect. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. This uncertainty seems to be reflected in the share price which, while stable, could be higher given the revenue forecasts.
Don't forget that there may be other risks. For instance, we've identified 2 warning signs for Arctech Solar Holding 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.
Arctech Solar 控股有限公司(上海證券交易所代碼:688408)股東們會很高興看到股價經歷了一個不錯的月份,漲幅爲31%,並從先前的疲軟中恢復過來。並非所有股東都會感到歡欣鼓舞,因爲股價在過去十二個月中仍然下跌了令人失望的22%。
儘管價格出現了大幅反彈,但與中國的電氣行業相比,Arctech Solar Holding目前的2.3倍市銷率(或 “市銷率”)似乎相當 “處於中間位置”,中國的電氣行業市銷率中位數約爲2.2倍,可以毫不誇張地說。儘管這可能不會引起任何關注,但如果市銷率不合理,投資者可能會錯過潛在的機會或無視迫在眉睫的失望情緒。
查看我們對Arctech太陽能控股公司的最新分析
Arctech Solar Holding最近的表現如何?
最近對Arctech Solar Holding來說是有利的,因爲其收入的增長速度快於大多數其他公司。一種可能性是市銷率適中,因爲投資者認爲這種強勁的收入表現可能即將結束。如果公司設法堅持下去,那麼投資者應該獲得與其收入數字相匹配的股價作爲獎勵。
如果你想了解分析師對未來的預測,你應該查看我們關於Arctech Solar Holding的免費報告。
Arctech Solar Holding的收入增長趨勢如何?
Arctech Solar Holding的市銷率對於一家預計只會實現適度增長且重要的是表現與行業持平的公司來說是典型的。