It's not a stretch to say that Juli Sling Co., Ltd.'s (SZSE:002342) price-to-sales (or "P/S") ratio of 1.7x right now seems quite "middle-of-the-road" for companies in the Metals and Mining industry in China, where the median P/S ratio is around 1.3x. 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.
Check out our latest analysis for Juli Sling
SZSE:002342 Price to Sales Ratio vs Industry January 19th 2024
How Has Juli Sling Performed Recently?
Juli Sling has been doing a decent job lately as it's been growing revenue at a reasonable pace. Perhaps the expectation moving forward is that the revenue growth will track in line with the wider industry for the near term, which has kept the P/S subdued. Those who are bullish on Juli Sling will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.
Although there are no analyst estimates available for Juli Sling, 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 P/S Ratio?
Juli Sling's 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.
If we review the last year of revenue growth, the company posted a worthy increase of 4.6%. Revenue has also lifted 8.8% in aggregate from three years ago, partly thanks to the last 12 months of growth. So we can start by confirming that the company has actually done a good job of growing revenue over that time.
Comparing that to the industry, which is predicted to deliver 16% 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 Juli Sling's P/S sits in line with the majority of other companies. Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now. They may be setting themselves up for future disappointment if the P/S falls to levels more in line with recent growth rates.
The Bottom Line On Juli Sling's P/S
We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
We've established that Juli Sling's average P/S is a bit surprising since its recent three-year growth is lower than the wider industry forecast. 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. If recent medium-term revenue trends continue, the probability of a share price decline will become quite substantial, placing shareholders at risk.
And what about other risks? Every company has them, and we've spotted 2 warning signs for Juli Sling you should know about.
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.
可以毫不夸张地说 Juli Sling 有限公司。”s(SZSE:002342)对于中国金属和采矿业的公司来说,目前1.7倍的市销率(或 “市盈率”)似乎相当 “中间道路”,市盈率中位数约为1.3倍。但是,不加解释地忽略市销率是不明智的,因为投资者可能会忽视一个明显的机会或一个代价高昂的错误。
查看我们对 Juli Sling 的最新分析
SZSE: 002342 对比行业的市销比率 2024 年 1 月 19 日
Juli Sling 最近表现如何?
Juli Sling最近做得不错,收入一直在以合理的速度增长。也许未来的预期是,收入增长将在短期内与整个行业保持一致,这使市销售率保持低迷。那些看好Juli Sling的人会希望情况并非如此,这样他们就可以以较低的估值买入股票。