NVC International Holdings Limited (HKG:2222) shareholders would be excited to see that the share price has had a great month, posting a 28% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 57%.
Although its price has surged higher, you could still be forgiven for feeling indifferent about NVC International Holdings' P/S ratio of 0.3x, since the median price-to-sales (or "P/S") ratio for the Household Products industry in Hong Kong is also close to 0.7x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
SEHK:2222 Price to Sales Ratio vs Industry April 12th 2024
What Does NVC International Holdings' P/S Mean For Shareholders?
For instance, NVC International Holdings' receding revenue in recent times would have to be some food for thought. One possibility is that the P/S is moderate because investors think the company might still do enough to be in line with the broader industry in the near future. If not, then existing shareholders may be a little nervous about the viability of the share price.
Although there are no analyst estimates available for NVC International Holdings, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
What Are Revenue Growth Metrics Telling Us About The P/S?
In order to justify its P/S ratio, NVC International Holdings would need to produce growth that's similar to the industry.
Retrospectively, the last year delivered a frustrating 14% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 34% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
In contrast to the company, the rest of the industry is expected to grow by 7.4% 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 NVC International 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. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
What We Can Learn From NVC International Holdings' P/S?
NVC International Holdings appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in 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.
The fact that NVC International Holdings currently trades at a P/S on par with the rest of the industry is surprising to us since its recent revenues have been in decline over the medium-term, all while the industry is set 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 the circumstances surrounding the recent medium-term improve, it wouldn't be wrong to expect a a difficult period ahead for the company's shareholders.
You should always think about risks. Case in point, we've spotted 3 warning signs for NVC International Holdings you should be aware of.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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.
NVC International Holdings Ltd (HKG: 2222)の株価が素晴らしい1か月を過ごし、先行弱勢から回復し、28%の上昇を記録したことによって、株主は興奮するでしょう。過去30日間で年間上昇率は非常に急激な57%になっています。
株価が高騰したとはいえ、香港の家庭用品業界の中央のPrice-To-Sales(「P/S」)比率が0.7倍に近く、NVC International Holdings株式のP/S比率が0.3倍であるために冷淡な感じを持つことを許されるかもしれません。しかしながら、P/Sが合理的な根拠がない場合に、投資家は明確な機会または潜在的な障害を見落としているかもしれません。
SEHK:2222 Price to Sales Ratio vs Industry April 12th 2024
NVC International HoldingsのP/Sは株主にとってどういう意味があるのでしょうか?
例えば、NVC International Holdingsの売上高の低迷が考慮されることになります。一つの可能性として、投資家たちが会社が近い将来に広範な業種と同じくらいのことをやると思っているため、P/Sが穏やかである可能性があります。そうでない場合は、株主が株価の生存可能性について少し神経質になるかもしれません。
NVC International Holdingsのアナリスト予測はありませんが、この無料のデータ豊富なビジュアル化を見て、収益、売上高、キャッシュフローの点で会社がどのように積み重なっているかを見てみましょう。
売上高成長メトリックスはP / Sについてどのように話しているのでしょうか?
NVC International Holdingsは業種と同じような成長を生み出す必要があるため、そのP/S比率を正当化する必要があります。
このように、NVC International HoldingsのP/Sが業界の同僚よりも高いことは心配すべきことです。最近の負の成長率に合わせて、P/Sが低下した場合、現存の株主は将来的に失望する可能性があります。
NVC International HoldingsのP/Sから学べることは何でしょうか?
NVC International Holdingsは、価格が一気に上昇し、そのP/Sが業界内の他の会社と同様になったことで再び人気になったようです。株式を売却するかどうかを決定するために、P / S比率だけを使用することは合理的ではありませんが、それは会社の将来の見通しに関する実用的なガイドとなるかもしれません。
NVC International Holdingsが現在業界全体と同じP/Sで取引しているという事実は私たちに驚きです。まだ業界が成長する中、同社の売上高が中期的に減少したままであるとしても、売上高が逆行している状況下で、穏やかなP/Sは下がる傾向にあるため、将来的に株価の減少が予想できます。
常にリスクについて考える必要があります。例えば、私たちはNVC International Holdingsの3つの警告サインを見つけました。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。