FS Development Investment Holdings (SZSE:300071) shares have had a horrible month, losing 25% after a relatively good period beforehand. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 49% share price drop.
After such a large drop in price, FS Development Investment Holdings' price-to-sales (or "P/S") ratio of 1.8x might make it look like a buy right now compared to the Media industry in China, where around half of the companies have P/S ratios above 2.3x and even P/S above 5x are quite common. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.
What Does FS Development Investment Holdings' Recent Performance Look Like?
Revenue has risen firmly for FS Development Investment Holdings recently, which is pleasing to see. Perhaps the market is expecting this acceptable revenue performance to take a dive, which has kept the P/S suppressed. If that doesn't eventuate, then existing shareholders have reason to be optimistic about the future direction of the share price.
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on FS Development Investment Holdings' earnings, revenue and cash flow.
Is There Any Revenue Growth Forecasted For FS Development Investment Holdings?
There's an inherent assumption that a company should underperform the industry for P/S ratios like FS Development Investment Holdings' to be considered reasonable.
If we review the last year of revenue growth, the company posted a terrific increase of 18%. The latest three year period has also seen a 12% overall rise in revenue, aided extensively by its short-term performance. Therefore, it's fair to say the revenue growth recently has been respectable for the company.
Comparing that to the industry, which is predicted to deliver 19% growth in the next 12 months, the company's momentum is weaker, based on recent medium-term annualised revenue results.
In light of this, it's understandable that FS Development Investment Holdings' P/S sits below the majority of other companies. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the wider industry.
The Final Word
The southerly movements of FS Development Investment Holdings' shares means its P/S is now sitting at a pretty low level. 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.
As we suspected, our examination of FS Development Investment Holdings revealed its three-year revenue trends are contributing to its low P/S, given they look worse than current industry expectations. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. If recent medium-term revenue trends continue, it's hard to see the share price experience a reversal of fortunes anytime soon.
You need to take note of risks, for example - FS Development Investment Holdings has 2 warning signs (and 1 which is concerning) we think 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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FS Development Investment Holdings(深圳證券交易所代碼:300071)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25%。在過去十二個月中已經持股的股東沒有獲得回報,反而坐視股價下跌了49%。
在價格大幅下跌之後,與中國的媒體行業相比,FS Development Investment Holdings的1.8倍市銷率(或 “市盈率”)現在可能看起來像買入。在中國,大約一半的公司的市銷率高於2.3倍,甚至市盈率高於5倍也很常見。但是,市銷率低可能是有原因的,需要進一步調查以確定其是否合理。
FS Development Investment Holdings股票的向南走勢意味着其市銷率目前處於相當低的水平。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。
正如我們所懷疑的那樣,我們對FS Development Investment Holdings的審查顯示,其三年收入趨勢是其低市銷率的原因,因爲這些趨勢看起來不如當前的行業預期。在現階段,投資者認爲,收入改善的可能性不足以證明更高的市銷率是合理的。如果最近的中期收入趨勢繼續下去,就很難看到股價在短期內出現命運逆轉。
您需要注意風險,例如,FS Development Investment Holdings有2個警告信號(其中一個令人擔憂),我們認爲您應該知道。