EPS Creative Health Technology Group Limited (HKG:3860) shareholders would be excited to see that the share price has had a great month, posting a 65% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 53%.
Since its price has surged higher, given close to half the companies operating in Hong Kong's Luxury industry have price-to-sales ratios (or "P/S") below 0.6x, you may consider EPS Creative Health Technology Group as a stock to potentially avoid with its 1.5x P/S ratio. However, the P/S might be high for a reason and it requires further investigation to determine if it's justified.
See our latest analysis for EPS Creative Health Technology Group
SEHK:3860 Price to Sales Ratio vs Industry October 27th 2023
What Does EPS Creative Health Technology Group's Recent Performance Look Like?
For instance, EPS Creative Health Technology Group's receding revenue in recent times would have to be some food for thought. Perhaps the market believes the company can do enough to outperform the rest of the industry in the near future, which is keeping the P/S ratio high. If not, then existing shareholders may be quite nervous about the viability of the share price.
Although there are no analyst estimates available for EPS Creative Health Technology Group, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
Do Revenue Forecasts Match The High P/S Ratio?
The only time you'd be truly comfortable seeing a P/S as high as EPS Creative Health Technology Group's is when the company's growth is on track to outshine the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 13%. This means it has also seen a slide in revenue over the longer-term as revenue is down 16% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 13% shows it's an unpleasant look.
In light of this, it's alarming that EPS Creative Health Technology Group's P/S sits above the majority of other companies. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh heavily on the share price eventually.
The Key Takeaway
The large bounce in EPS Creative Health Technology Group's shares has lifted the company's P/S handsomely. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We've established that EPS Creative Health Technology Group currently trades on a much higher than expected P/S since its recent revenues have been in decline over the medium-term. When we see revenue heading backwards and underperforming the industry forecasts, we feel the possibility of the share price declining is very real, bringing the P/S back into the realm of reasonability. If recent medium-term revenue trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Don't forget that there may be other risks. For instance, we've identified 3 warning signs for EPS Creative Health Technology Group (2 don't sit too well with us) you should be aware of.
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.
EPS Creative Health Technology Group Limited(HKG:3860)の株価が素晴らしい1か月を過ごした結果、株価が大幅に上昇し、以前の弱点から回復したことを株主たちは喜ぶでしょう。 過去30日間で年間利益は非常に急激な53%となっています。
香港の高級品業界において営業している企業の約半分が「P/S比」が0.6倍未満であることを考慮すると、1.5倍のP/S比率を持つEPS Creative Health Technology Groupを株式市場から避ける可能性があります。ただし、P/S比率が高い理由を調査する必要があります。
EPS Creative Health Technology Groupの最新の分析を見る
SEHK:3860 売上高倍率対業種 2023年10月27日
EPS Creative Health Technology Groupの最近のパフォーマンスはどのように見えますか?
たとえば、EPS Creative Health Technology Groupの収益減少傾向は慎重に考えなければなりません。おそらく市場は、将来的に業界全体を上回ることができると思われるため、P/S比率が高い状態を保っていると考えています。そうでない場合、既存株主は株価の持続可能性について非常に不安に感じている可能性があります。
EPS Creative Health Technology Groupに関してアナリストの予想はありませんが、このデータ豊富な視覚化をご覧ください。企業の収益、売上高、キャッシュフローについて並べて比較できます。
このため、EPS Creative Health Technology GroupのP/S比が他の多くの企業を上回っているのは懸念材料です。多くの投資家が最近の低成長率を無視して、企業のビジネスの見通しの好転を期待しているようです。しかしこの価格が持続可能であると仮定するのは大胆すぎます。さらに、最近の売上高のトレンドが持続すると、株価に大きな影響を与える可能性があることを考えると、その価格は持続不可能な水準となるでしょう。
重要なポイント
EPS Creative Health Technology Groupの株価が大きく上昇したため、同社のP/S比率も大幅に上昇しました。同じ業界内では、P/S比率はあまり価値のある評価尺度ではないとされていますが、企業のビジネスのセンチメント・インデックスに影響を与える力はあるとされています。
最近の中期的な売上高が減少傾向にあるため、EPS Creative Health Technology Groupが現在予想を上回る高いP/S比で取引していることを確認しました。さらに、業界予測を下回る売上高が減少し、それが前進方向に向かう見込みがない場合、株価が下落する可能性が非常に高くなり、P/S比が妥当な水準に戻る可能性があります。中期的な売上高のトレンドが続く場合、株主の投資や潜在的な投資家にとってリスクが膨大になります。
EPS Creative Health Technology Groupには他にもリスクがあることを忘れないでください。たとえば、弊社ではEPS Creative Health Technology Groupについて3つの警告サインを特定しています(2つはあまり良くありません)。それらのサインに注意してください。
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。