Asiaray Media Group Limited (HKG:1993) shareholders that were waiting for something to happen have been dealt a blow with a 34% share price drop in the last month. For any long-term shareholders, the last month ends a year to forget by locking in a 59% share price decline.
Even after such a large drop in price, there still wouldn't be many who think Asiaray Media Group's price-to-sales (or "P/S") ratio of 0.2x is worth a mention when the median P/S in Hong Kong's Media industry is similar at about 0.6x. 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.
How Asiaray Media Group Has Been Performing
For example, consider that Asiaray Media Group's financial performance has been poor lately as its revenue has been in decline. 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.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Asiaray Media Group will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The P/S?
There's an inherent assumption that a company should be matching the industry for P/S ratios like Asiaray Media Group's to be considered reasonable.
Retrospectively, the last year delivered a frustrating 9.0% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 3.5% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Comparing that to the industry, which is predicted to deliver 14% 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 Asiaray Media Group is trading at a fairly similar P/S compared to 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 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 Key Takeaway
Asiaray Media Group's plummeting stock price has brought its P/S back to a similar region as the rest of the industry. 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 look at Asiaray Media Group 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 the circumstances surrounding the recent medium-term improve, it wouldn't be wrong to expect a a difficult period ahead for the company's shareholders.
Before you take the next step, you should know about the 3 warning signs for Asiaray Media Group (1 is potentially serious!) that we have uncovered.
If these risks are making you reconsider your opinion on Asiaray Media Group, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
上個月股價下跌了34%,這給那些等待事情發生的Asiaray Media Group Limited(HKG: 1993)的股東受到了打擊。對於任何長期股東來說,最後一個月的股價下跌幅度爲59%,從而結束了令人難忘的一年。
即使價格下跌如此之大,當香港媒體行業的市盈率中位數約爲0.6倍時,仍然沒有多少人認爲Asiaray Media Group的0.2倍市銷率(或 “市銷率”)值得一提。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。
Asiaray Media Group 的表現如何
例如,假設Asiaray Media Group最近由於收入下降而財務表現不佳。也許投資者認爲最近的收入表現足以與該行業保持一致,這阻止了市銷率的下降。如果你喜歡這家公司,你至少希望情況確實如此,這樣你就有可能在它不太受青睞的情況下買入一些股票。
想全面了解公司的收益、收入和現金流嗎?那麼我們關於Asiaray Media Group的免費報告將幫助您了解其歷史表現。
收入增長指標告訴我們有關P/S的哪些信息?
人們固有的假設是,公司應該與行業相提並論,這樣像Asiaray Media Group這樣的市銷率才算合理。