D&O Home Collection Group Co.,LTD (SZSE:002798) shareholders that were waiting for something to happen have been dealt a blow with a 26% share price drop in the last month. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 37% in that time.
Since its price has dipped substantially, given about half the companies operating in China's Building industry have price-to-sales ratios (or "P/S") above 1.8x, you may consider D&O Home Collection GroupLTD as an attractive investment with its 0.5x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.
What Does D&O Home Collection GroupLTD's P/S Mean For Shareholders?
As an illustration, revenue has deteriorated at D&O Home Collection GroupLTD over the last year, which is not ideal at all. It might be that many expect the disappointing revenue performance to continue or accelerate, which has repressed the P/S. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on D&O Home Collection GroupLTD will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The Low P/S?
D&O Home Collection GroupLTD's P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the industry.
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 20%. The last three years don't look nice either as the company has shrunk revenue by 31% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
In contrast to the company, the rest of the industry is expected to grow by 24% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
With this information, we are not surprised that D&O Home Collection GroupLTD is trading at a P/S lower than the industry. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.
The Final Word
The southerly movements of D&O Home Collection GroupLTD's shares means its P/S is now sitting at a pretty low level. 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.
Our examination of D&O Home Collection GroupLTD confirms that the company's shrinking revenue over the past medium-term is a key factor in its low price-to-sales ratio, given the industry is projected to grow. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises either. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.
And what about other risks? Every company has them, and we've spotted 2 warning signs for D&O Home Collection GroupLTD 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.
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由於D&O Home Collection GroupLtd的價格已大幅下跌,鑑於在中國建築行業運營的公司中約有一半的市銷率(或 “市銷率”)高於1.8倍,您可以將D&O Home Collection GroupLtd視爲具有0.5倍市銷率的有吸引力的投資。但是,僅按面值計算市銷率是不明智的,因爲可以解釋其有限的原因。
D&O Home Collection GroupLtd的市銷率對股東意味着什麼?
舉例來說,去年,D&O Home Collection GroupLtd的收入有所下降,這根本不理想。許多人可能預計,令人失望的收入表現將持續或加速,這抑制了市銷率。如果你喜歡這家公司,你會希望情況並非如此,這樣你就有可能在股票失寵的時候買入一些股票。
想全面了解公司的收益、收入和現金流嗎?然後,我們關於D&O Home Collection GroupLtd的免費報告將幫助您了解其歷史表現。
關於低市盈率,收入增長指標告訴我們什麼?
D&O Home Collection GroupLtd的市銷率對於一家預計增長有限,而且重要的是表現不如行業的公司來說是典型的。
有了這些信息,我們對D&O Home Collection GroupLtd的市銷售率低於該行業也就不足爲奇了。但是,尚不能保證市銷率已達到最低水平,收入反向增長。如果公司不改善營收增長,市銷率有可能降至更低的水平。
最後一句話
D&O Home Collection GroupLtd的股價向南走勢意味着其市銷率目前處於相當低的水平。有人認爲,在某些行業中,市銷率是衡量價值的較差指標,但它可以是一個有力的商業信心指標。
我們對D&O Home Collection GroupLtd的審查證實,鑑於該行業預計將增長,該公司在過去的中期收入萎縮是其低市銷率的關鍵因素。目前,股東們正在接受低市銷率,因爲他們承認未來的收入可能也不會帶來任何驚喜。鑑於目前的情況,如果最近的中期收入趨勢持續下去,股價似乎不太可能在不久的將來雙向出現任何重大波動。
那其他風險呢?每家公司都有它們,我們發現了兩個你應該知道的D&O Home Collection GroupLtd警告標誌。