Stronghold Digital Mining, Inc. (NASDAQ:SDIG) shareholders won't be pleased to see that the share price has had a very rough month, dropping 27% and undoing the prior period's positive performance. For any long-term shareholders, the last month ends a year to forget by locking in a 61% share price decline.
Following the heavy fall in price, Stronghold Digital Mining's price-to-sales (or "P/S") ratio of 0.4x might make it look like a strong buy right now compared to the wider Software industry in the United States, where around half of the companies have P/S ratios above 4.5x and even P/S above 11x are quite common. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so limited.
NasdaqGM:SDIG Price to Sales Ratio vs Industry August 13th 2024
What Does Stronghold Digital Mining's P/S Mean For Shareholders?
Stronghold Digital Mining hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. It seems that many are expecting the poor revenue performance to persist, which has repressed the P/S ratio. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value.
Want the full picture on analyst estimates for the company? Then our free report on Stronghold Digital Mining will help you uncover what's on the horizon.
How Is Stronghold Digital Mining's Revenue Growth Trending?
The only time you'd be truly comfortable seeing a P/S as depressed as Stronghold Digital Mining's is when the company's growth is on track to lag the industry decidedly.
Retrospectively, the last year delivered a frustrating 13% decrease to the company's top line. In spite of this, the company still managed to deliver immense revenue growth over the last three years. So while the company has done a great job in the past, it's somewhat concerning to see revenue growth decline so harshly.
Turning to the outlook, the next year should generate growth of 6.5% as estimated by the three analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 22%, which is noticeably more attractive.
In light of this, it's understandable that Stronghold Digital Mining's P/S sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
What We Can Learn From Stronghold Digital Mining's P/S?
Having almost fallen off a cliff, Stronghold Digital Mining's share price has pulled its P/S way down as well. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.
We've established that Stronghold Digital Mining maintains its low P/S on the weakness of its forecast growth being lower than the wider industry, as expected. Shareholders' pessimism on the revenue prospects for the company seems to be the main contributor to the depressed P/S. The company will need a change of fortune to justify the P/S rising higher in the future.
You should always think about risks. Case in point, we've spotted 7 warning signs for Stronghold Digital Mining you should be aware of, and 4 of them don't sit too well with us.
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.
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.
Stronghold Digital Mining, Inc.(納斯達克股票代碼:SDIG)股東不會高興地看到股價經歷了一個非常艱難的月份,下跌了27%,抵消了前一時期的積極表現。對於任何長期股東來說,最後一個月的股價跌幅爲61%,從而結束了令人難忘的一年。
在價格大幅下跌之後,Stronghold Digital Mining的0.4倍市銷率(或 「市盈率」)與美國整個軟件行業相比,目前看上去像是一個強勁的買盤,在美國,大約一半的公司的市銷率高於4.5倍,甚至市盈率高於11倍也很常見。但是,僅按面值計算市銷率是不明智的,因爲可以解釋其爲何如此有限。
納斯達克通用汽車公司:SDIG 與行業的股價銷售比率 2024 年 8 月 13 日
Stronghold Digital Mining的市銷率對股東意味着什麼?
Stronghold Digital Mining最近表現不佳,其收入下降與其他公司相比表現不佳,後者的平均收入有所增長。看來許多人預計糟糕的收入表現將持續下去,這抑制了市銷率。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。
想全面了解分析師對公司的估計嗎?那麼我們關於要塞數字採礦的免費報告將幫助您發現即將發生的事情。
Stronghold Digital Mining 的收入增長趨勢如何?
只有當公司的增長有望明顯落後於該行業時,你才能真正放心地看到像Stronghold Digital Mining一樣低迷的市銷率。