Pak Tak International Limited (HKG:2668) shares have had a really impressive month, gaining 34% after a shaky period beforehand. The last 30 days were the cherry on top of the stock's 815% gain in the last year, which is nothing short of spectacular.
Following the firm bounce in price, you could be forgiven for thinking Pak Tak International is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 4.1x, considering almost half the companies in Hong Kong's Luxury industry have P/S ratios below 0.7x. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.
How Has Pak Tak International Performed Recently?
As an illustration, revenue has deteriorated at Pak Tak International over the last year, which is not ideal at all. It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/S from collapsing. However, if this isn't the case, investors might get caught out paying too much for the stock.
Although there are no analyst estimates available for Pak Tak International, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
Is There Enough Revenue Growth Forecasted For Pak Tak International?
There's an inherent assumption that a company should far outperform the industry for P/S ratios like Pak Tak International's to be considered reasonable.
Retrospectively, the last year delivered a frustrating 44% decrease to the company's top line. The last three years don't look nice either as the company has shrunk revenue by 86% 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 13% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
With this in mind, we find it worrying that Pak Tak International's P/S exceeds that of its industry peers. 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 heavily on the share price eventually.
What We Can Learn From Pak Tak International's P/S?
The strong share price surge has lead to Pak Tak International's P/S soaring as well. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that Pak Tak International currently trades on a much higher than expected P/S since its recent revenues have been in decline over the medium-term. With a revenue decline on investors' minds, the likelihood of a souring sentiment is quite high which could send the P/S back in line with what we'd expect. If recent medium-term revenue trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
And what about other risks? Every company has them, and we've spotted 4 warning signs for Pak Tak International (of which 2 are concerning!) you should know about.
If you're unsure about the strength of Pak Tak International's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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Pak Tak International Limited(HKG:2668)股票的表現非常出色,經歷了顫抖時期後,在過去一個月內上漲了34%。過去一年,該股票上漲了815%,令人矚目。
考慮到香港奢侈品行業中近一半公司的市銷率低於0.7倍,價格與銷售額比(或“P / S”)爲4.1倍的Pak Tak International並非可以避開的股票。但是,不明智的是,不能僅僅看P / S而不加解釋而高昂。
Pak Tak International近期表現如何?
舉個例子,Pak Tak International的收入在過去一年中有所下降,這一點都不理想。也許許多人期望該公司在未來的時期仍將超過大多數其他公司,這使得P / S沒有崩塌。但是,如果情況並非如此,投資者可能會被迫爲該股票支付過多的費用。
儘管無法獲得Pak Tak International的分析師估計,但可以查看這個免費的數據豐富的可視化,以了解該公司在收入,營收和現金流方面的表現。
Pak Tak International的營業收入是否有足夠的增長預期?
假定公司的市銷率像Pak Tak International一樣,如果公司成績優異,則市銷率被認爲是合理的。