Risecomm Group Holdings Limited (HKG:1679) shareholders that were waiting for something to happen have been dealt a blow with a 26% share price drop in the last month. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 29% in that time.
In spite of the heavy fall in price, you could still be forgiven for feeling indifferent about Risecomm Group Holdings' P/S ratio of 1x, since the median price-to-sales (or "P/S") ratio for the Semiconductor industry in Hong Kong is also close to 1.2x. 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:1679 Price to Sales Ratio vs Industry July 4th 2024
How Has Risecomm Group Holdings Performed Recently?
For example, consider that Risecomm Group Holdings' 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.
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 Risecomm Group Holdings' earnings, revenue and cash flow.
How Is Risecomm Group Holdings' Revenue Growth Trending?
In order to justify its P/S ratio, Risecomm Group Holdings would need to produce growth that's similar to the industry.
Retrospectively, the last year delivered a frustrating 37% decrease to the company's top line. As a result, revenue from three years ago have also fallen 55% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Comparing that to the industry, which is predicted to deliver 13% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.
With this in mind, we find it worrying that Risecomm Group Holdings' P/S exceeds that of its industry peers. Apparently many investors in the company are way less bearish than recent times would indicate and aren't willing to let go of their stock right now. 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.
What We Can Learn From Risecomm Group Holdings' P/S?
Risecomm Group Holdings' plummeting stock price has brought its P/S back to a similar region as the rest of the industry. 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 Risecomm 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. When we see revenue heading backwards in the context of growing industry forecasts, it'd make sense to expect a possible share price decline on the horizon, sending the moderate P/S lower. Unless the recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
Having said that, be aware Risecomm Group Holdings is showing 6 warning signs in our investment analysis, and 3 of those are significant.
If these risks are making you reconsider your opinion on Risecomm 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
在生成股票資產時您應該遵循以下所有規則:
- 最近一個月,香港股票1679的Risecomm Group Holding Limited股東們失望地發現股價下跌了26%。在過去的30天裏,股價下跌了至29%。
股票價格急劇下跌, Risecomm Group Holdings的P/S比率仍然爲1x, 而香港半導體行業的中位數市銷率(P/S)比率也接近於1.2x。儘管如此,忽略P/S比率,並且沒有解釋說明是不明智的, 因爲投資者可能會忽視一個明顯的機會或昂貴的錯誤。
SEHK:1679市銷率與行業板塊比較_2024年7月4日
Risecomm Group Holdings最近表現如何?
舉個例子,Risecomm Group Holdings的財務表現近來一直下滑,營業收入也持續下降。也許,投資者認爲最近的營業收入表現足以保持與行業一致,這也使P/S比率沒有下降。如果您喜歡該公司,您至少應該希望如此,這樣您就可以在股票未完全受歡迎時買入一些股票。
我們沒有分析師的預測數據,但您可以查看我們的免費報告以了解Risecomm Group Holdings的收入、營業收入和現金流等近期趨勢,爲未來做好準備。