Home Control International Limited (HKG:1747) shares have had a horrible month, losing 26% after a relatively good period beforehand. For any long-term shareholders, the last month ends a year to forget by locking in a 50% share price decline.
Although its price has dipped substantially, you could still be forgiven for feeling indifferent about Home Control International's P/S ratio of 0.2x, since the median price-to-sales (or "P/S") ratio for the Consumer Durables industry in Hong Kong is also close to 0.4x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
SEHK:1747 Price to Sales Ratio vs Industry April 29th 2024
What Does Home Control International's Recent Performance Look Like?
Home Control International has been struggling lately as its revenue has declined faster than most other companies. It might be that many expect the dismal revenue performance to revert back to industry averages soon, which has kept the P/S from falling. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value. If not, then existing shareholders may be a little nervous about the viability of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Home Control International.
Is There Some Revenue Growth Forecasted For Home Control International?
Home Control International'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.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 20%. This means it has also seen a slide in revenue over the longer-term as revenue is down 25% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Turning to the outlook, the next year should generate growth of 9.4% as estimated by the sole analyst watching the company. Meanwhile, the rest of the industry is forecast to expand by 14%, which is noticeably more attractive.
With this information, we find it interesting that Home Control International is trading at a fairly similar P/S compared to the industry. Apparently many investors in the company are less bearish than analysts indicate and aren't willing to let go of their stock right now. These shareholders may be setting themselves up for future disappointment if the P/S falls to levels more in line with the growth outlook.
What Does Home Control International's P/S Mean For Investors?
Following Home Control International's share price tumble, its P/S is just clinging on to the industry median P/S. 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.
When you consider that Home Control International's revenue growth estimates are fairly muted compared to the broader industry, it's easy to see why we consider it unexpected to be trading at its current P/S ratio. When we see companies with a relatively weaker revenue outlook compared to the industry, we suspect the share price is at risk of declining, sending the moderate P/S lower. Circumstances like this present a risk to current and prospective investors who may see share prices fall if the low revenue growth impacts the sentiment.
It is also worth noting that we have found 3 warning signs for Home Control International (2 don't sit too well with us!) that you need to take into consideration.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
Home Control International Limited(HKG: 1747)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26%。對於任何長期股東來說,最後一個月的股價下跌幅度鎖定了50%,從而結束了令人難忘的一年。
儘管其價格已大幅下跌,但您對Home Control International的0.2倍市盈率漠不關心仍然是可以原諒的,因爲香港耐用消費品行業的中位市銷率(或 “市盈率”)也接近0.4倍。但是,不加解釋地忽略市銷率是不明智的,因爲投資者可能會忽視一個明顯的機會或一個代價高昂的錯誤。
SEHK: 1747 2024 年 4 月 29 日與行業的股價銷售比率
Home Control International最近的表現如何?
由於其收入的下降速度快於大多數其他公司,Home Control International最近一直處於困境。許多人可能預計,慘淡的收入表現將很快恢復到行業平均水平,這阻止了市銷售率的下降。因此,儘管你可以說股票很便宜,但投資者在將其視爲物有所值之前會尋求改善。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
如果你想了解分析師對未來的預測,你應該查看我們關於Home Control International的免費報告。
預計Home Control International的收入會增長嗎?
Home Control International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。
有了這些信息,我們發現有趣的是,與行業相比,Home Control International的交易市銷率相當相似。顯然,該公司的許多投資者沒有分析師所表示的那麼看跌,並且不願意立即放棄股票。如果市銷率降至更符合增長前景的水平,這些股東可能會爲未來的失望做好準備。
Home Control International的市銷率對投資者意味着什麼?
繼Home Control International股價暴跌之後,其市盈率一直保持在行業市盈率中位數水平。儘管市銷率不應成爲決定你是否買入股票的決定性因素,但它卻是衡量收入預期的有力晴雨表。
當你考慮到與整個行業相比,Home Control International的收入增長預期相當低迷時,不難理解我們爲何認爲以目前的市銷率進行交易是出乎意料的。當我們看到與該行業相比收入前景相對疲軟的公司時,我們懷疑股價有下跌的風險,從而使溫和的市銷售率走低。像這樣的情況給當前和潛在的投資者帶來了風險,如果低收入增長影響市場情緒,他們可能會看到股價下跌。
還值得注意的是,我們已經發現了 Home Control International 的 3 個警告信號(2 個不要坐得太好!)這是你需要考慮的。