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
Risecomm Group Holdings Limited(HKG:1679)の株主は、何か起こるのを待っていたところ、過去1か月間に株価が26%下落し、打ちのめされました。過去30日間の下落は、株主にとって厳しい1年に終止符を打ち、その間の株価は29%下落しました。
価格/売上高(「P/S」)比率が1倍である Risecomm Group Holdings の P/S 比率について、香港の半導体業界の中央価格対売上高(または「P/S」)比率も1.2倍に近いため、価格が大幅に下落したとしても、ただ閑散としている気持ちになることができます。ただし、株価対売上高比率を説明なしに無視することは賢明ではなく、投資家が明らかな機会またはコストのかかる失敗を無視していない可能性があるためです。
SEHK:1679の価格対売上高比率 対 業界 2024年7月4日
Risecomm Group Holdings の最近のパフォーマンスはどうでしたか?
たとえば、Risecomm Group Holdings の財務パフォーマンスは最近低迷しており、売上が減少しています。最近の売上パフォーマンスが業界と同等であることが P/S が低下しない理由だと投資家が信じているかもしれないため、会社が好きな場合、株価が好調でない状況で株を購入できる可能性があることを願っています。
アナリストの予測値はありませんが、Risecomm Group Holdings の収益、売上高、キャッシュフローに関する無料レポートをチェックすることで、最近のトレンドが企業の将来の見通しを準備しているかどうかを確認できます。
Risecomm Group Holdings の売上高はどうなっていますか?
そのため、Risecomm Group HoldingsのP/S比率を正当化するには、業界と同様の成長を生み出す必要があります。
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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。