Grown Up Group Investment Holdings Limited (HKG:1842) shareholders that were waiting for something to happen have been dealt a blow with a 26% share price drop in the last month. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 58% loss during that time.
Although its price has dipped substantially, there still wouldn't be many who think Grown Up Group Investment Holdings' price-to-sales (or "P/S") ratio of 0.2x is worth a mention when the median P/S in Hong Kong's Luxury industry is similar at about 0.6x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
How Has Grown Up Group Investment Holdings Performed Recently?
As an illustration, revenue has deteriorated at Grown Up Group Investment Holdings over the last year, which is not ideal at all. 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 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.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Grown Up Group Investment Holdings will help you shine a light on its historical performance.
Do Revenue Forecasts Match The P/S Ratio?
Grown Up Group Investment Holdings' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 22%. Regardless, revenue has managed to lift by a handy 16% in aggregate from three years ago, thanks to the earlier period of growth. Although it's been a bumpy ride, it's still fair to say the revenue growth recently has been mostly respectable for the company.
Comparing that to the industry, which is predicted to deliver 11% growth in the next 12 months, the company's momentum is weaker, based on recent medium-term annualised revenue results.
In light of this, it's curious that Grown Up Group Investment Holdings' P/S sits in line with the majority of other companies. It seems most investors are ignoring the fairly limited recent growth rates and are willing to pay up for exposure to the stock. They may be setting themselves up for future disappointment if the P/S falls to levels more in line with recent growth rates.
The Key Takeaway
Grown Up Group Investment Holdings' plummeting stock price has brought its P/S back to a similar region as the rest of the industry. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
Our examination of Grown Up Group Investment Holdings revealed its poor three-year revenue trends aren't resulting in a lower P/S as per our expectations, given they look worse than current industry outlook. When we see weak revenue with slower than industry growth, we suspect the share price is at risk of declining, bringing the P/S back in line with expectations. Unless the recent medium-term conditions improve, it's hard to accept the current share price as fair value.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Grown Up Group Investment Holdings, and understanding them should be part of your investment process.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
Grown Up Group Investment Holdings Limited(HKG:1842)の株主は、何かが起こるのを待っていたが、先月26%の株価下落という打撃を受けた。最近の下落は、株主にとって災厄の12か月間を完結させ、その間に58%の損失を被っている。
株価は大幅に下落したにも関わらず、Grown Up Group Investment Holdingsの時価総額(P/S)倍率は0.2倍と、香港のラグジュアリー業界の中央値である0.6倍程度にも言及に値しないと考える人は多くはないだろう。これは何も引起こさないかもしれないが、P/S倍率が正当化されていない場合、投資家は潜在的な機会を見落としたり、迫り来る失望を無視しているかもしれない。
Grown Up Group Investment Holdingsは最近どういうパフォーマンスを発揮しているのですか?
たとえば、売上高が過去1年間で悪化しているGrown Up Group Investment Holdingsでは、それは全く理想的ではありません。1つの可能性は、P/Sが適度であるため、投資家が将来近い将来に業界全体に合わせるために十分なことをまだ思っているということです。会社が好きなら、少なくとも、あなたが株を持つことができるようになる前に、それが完全に人気を博さなくなる期間にその株を購入することを望むでしょう。
会社の収益、売上高、キャッシュフローについての詳しい情報をお望みですか?Grown Up Group Investment Holdingsについての無料レポートは、その歴史的なパフォーマンスについて光を当てるのに役立ちます。
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。
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。