Basetrophy Group Holdings Limited (HKG:8460) shares have had a horrible month, losing 32% after a relatively good period beforehand. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 23% in that time.
Even after such a large drop in price, it's still not a stretch to say that Basetrophy Group Holdings' price-to-sales (or "P/S") ratio of 0.2x right now seems quite "middle-of-the-road" compared to the Construction industry in Hong Kong, where the median P/S ratio is around 0.3x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
SEHK:8460 Price to Sales Ratio vs Industry February 8th 2024
How Has Basetrophy Group Holdings Performed Recently?
For example, consider that Basetrophy Group Holdings' financial performance has been poor lately as its revenue has been in decline. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. 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 Basetrophy Group Holdings will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The P/S?
In order to justify its P/S ratio, Basetrophy Group Holdings would need to produce growth that's similar to 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 8.4%. As a result, revenue from three years ago have also fallen 30% overall. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 13% shows it's an unpleasant look.
With this information, we find it concerning that Basetrophy Group Holdings 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. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh on the share price eventually.
The Bottom Line On Basetrophy Group Holdings' P/S
Following Basetrophy Group Holdings' share price tumble, its P/S is just clinging on to the industry median P/S. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
We find it unexpected that Basetrophy Group Holdings trades at a P/S ratio that is comparable to the rest of the industry, despite experiencing declining revenues during the medium-term, while the industry as a whole is expected 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 recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
You need to take note of risks, for example - Basetrophy Group Holdings has 3 warning signs (and 2 which are potentially serious) we think you should know about.
If these risks are making you reconsider your opinion on Basetrophy Group Holdings, 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.
Basetrophy Group Holdings Limited(HKG: 8460)的股價經歷了一個糟糕的月份,在經歷了相對不錯的時期之後下跌了32%。過去30天的下跌結束了股東艱難的一年,當時股價下跌了23%。
即使在價格大幅下跌之後,與香港建築業相比,Basetrophy Group Holdings目前0.2倍的市銷率(或 “市盈率”)似乎相當 “處於中間位置”,Basetrophy Group Holdings的市銷率中位數約爲0.3倍,仍然不費吹灰之力。但是,如果市銷率沒有合理的基礎,投資者可能會忽略明顯的機會或潛在的挫折。
SEHK: 8460 與行業的股價銷售比率 2024 年 2 月 8 日
Basetrophy 集團控股公司最近表現如何?
例如,假設由於收入下降,Basetrophy Group Holdings的財務表現不佳。許多人可能預計,該公司將在未來一段時間內將令人失望的收入表現拋在腦後,這阻止了市銷售率的下降。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?然後,我們關於Basetrophy Group Holdings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?
爲了證明其市銷率是合理的,Basetrophy Group Holdings需要實現與該行業相似的增長。
有了這些信息,我們發現Basetrophy Group Holdings的市銷率與該行業相似。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。只有最大膽的人才會假設這些價格是可持續的,因爲近期收入趨勢的延續最終可能會壓制股價。
Basetrophy Group Holdings市銷率的底線
在Basetrophy Group Holdings股價暴跌之後,其市盈率僅保持在行業市盈率中位數上。僅使用市銷售比率來確定是否應該出售股票是不明智的,但它可以作爲公司未來前景的實用指南。
我們發現,儘管中期收入下降,但Basetrophy Group Holdings的市銷率與該行業其他部門相當,這出乎意料,而整個行業預計將增長。儘管它與行業相匹配,但我們對當前的市銷率感到不舒服,因爲這種慘淡的收入表現不太可能長期支持更積極的情緒。除非最近的中期狀況明顯改善,否則投資者將很難接受股價作爲公允價值。
例如,你需要注意風險——Basetrophy Group Holdings有3個警告信號(其中2個可能很嚴重),我們認爲你應該知道。
如果這些風險讓你重新考慮你對Basetrophy Group Holdings的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。