Those holding Basetrophy Group Holdings Limited (HKG:8460) shares would be relieved that the share price has rebounded 38% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. But the last month did very little to improve the 67% share price decline over the last year.
Although its price has surged higher, it's still not a stretch to say that Basetrophy Group Holdings' price-to-sales (or "P/S") ratio of 0.1x right now seems quite "middle-of-the-road" compared to the Construction industry in Hong Kong, where the median P/S ratio is around 0.3x. 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.
What Does Basetrophy Group Holdings' P/S Mean For Shareholders?
With revenue growth that's exceedingly strong of late, Basetrophy Group Holdings has been doing very well. The P/S is probably moderate because investors think this strong revenue growth might not be enough to outperform the broader industry in the near future. Those who are bullish on Basetrophy Group Holdings will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Basetrophy Group Holdings will help you shine a light on its historical performance.
Do Revenue Forecasts Match The P/S Ratio?
The only time you'd be comfortable seeing a P/S like Basetrophy Group Holdings' is when the company's growth is tracking the industry closely.
Taking a look back first, we see that the company grew revenue by an impressive 38% last year. The strong recent performance means it was also able to grow revenue by 48% in total over the last three years. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.
This is in contrast to the rest of the industry, which is expected to grow by 10% over the next year, materially lower than the company's recent medium-term annualised growth rates.
In light of this, it's curious that Basetrophy Group Holdings' P/S sits in line with the majority of other companies. It may be that most investors are not convinced the company can maintain its recent growth rates.
What Does Basetrophy Group Holdings' P/S Mean For Investors?
Basetrophy Group Holdings' stock has a lot of momentum behind it lately, which has brought its P/S level with 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.
To our surprise, Basetrophy Group Holdings revealed its three-year revenue trends aren't contributing to its P/S as much as we would have predicted, given they look better than current industry expectations. There could be some unobserved threats to revenue preventing the P/S ratio from matching this positive performance. While recent revenue trends over the past medium-term suggest that the risk of a price decline is low, investors appear to see the likelihood of revenue fluctuations in the future.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Basetrophy Group Holdings, and understanding them should be part of your investment process.
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.
持有Basetrophy Group Holdings Limited (HKG:8460)股票的人會感到寬慰,因爲股價在過去三十天內反彈了38%,但需要繼續努力修復最近對投資者投資組合造成的損失。但過去一個月對於過去一年中股價下跌67%的情況沒有什麼改善。
儘管股價大幅上漲,但可以說Basetrophy Group Holdings目前的市銷率爲0.1倍,與香港的施工行業中位數市銷率約0.3倍相比似乎相對「中庸」。然而,沒有解釋就簡單地忽視市銷率並不明智,因爲投資者可能正在忽略一個獨特的機會或一個昂貴的錯誤。
Basetrophy Group Holdings的市銷率對股東意味着什麼?
最近營收增長非常強勁,Basetrophy Group Holdings表現非常出色。市銷率可能處於中等水平,因爲投資者認爲這種強勁的營收增長可能不足以在不久的將來跑贏更廣泛的行業。那些對Basetrophy Group Holdings看好的人會希望情況並非如此,這樣就可以以更低的估值買入該股。
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