D&O Home Collection Group Co.,LTD (SZSE:002798) 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 37% in that time.
Since its price has dipped substantially, given about half the companies operating in China's Building industry have price-to-sales ratios (or "P/S") above 1.8x, you may consider D&O Home Collection GroupLTD as an attractive investment with its 0.5x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.
What Does D&O Home Collection GroupLTD's P/S Mean For Shareholders?
As an illustration, revenue has deteriorated at D&O Home Collection GroupLTD over the last year, which is not ideal at all. It might be that many expect the disappointing revenue performance to continue or accelerate, which has repressed the P/S. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on D&O Home Collection GroupLTD will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The Low P/S?
D&O Home Collection GroupLTD's P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than 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 20%. The last three years don't look nice either as the company has shrunk revenue by 31% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
In contrast to the company, the rest of the industry is expected to grow by 24% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
With this information, we are not surprised that D&O Home Collection GroupLTD is trading at a P/S lower than the industry. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.
The Final Word
The southerly movements of D&O Home Collection GroupLTD's shares means its P/S is now sitting at a pretty low level. 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.
Our examination of D&O Home Collection GroupLTD confirms that the company's shrinking revenue over the past medium-term is a key factor in its low price-to-sales ratio, given the industry is projected to grow. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises either. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.
And what about other risks? Every company has them, and we've spotted 2 warning signs for D&O Home Collection GroupLTD you should know about.
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.
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由于D&O Home Collection GroupLtd的价格已大幅下跌,鉴于在中国建筑行业运营的公司中约有一半的市销率(或 “市销率”)高于1.8倍,您可以将D&O Home Collection GroupLtd视为具有0.5倍市销率的有吸引力的投资。但是,仅按面值计算市销率是不明智的,因为可以解释其有限的原因。
D&O Home Collection GroupLtd的市销率对股东意味着什么?
举例来说,去年,D&O Home Collection GroupLtd的收入有所下降,这根本不理想。许多人可能预计,令人失望的收入表现将持续或加速,这抑制了市销率。如果你喜欢这家公司,你会希望情况并非如此,这样你就有可能在股票失宠的时候买入一些股票。
想全面了解公司的收益、收入和现金流吗?然后,我们关于D&O Home Collection GroupLtd的免费报告将帮助您了解其历史表现。
关于低市盈率,收入增长指标告诉我们什么?
D&O Home Collection GroupLtd的市销率对于一家预计增长有限,而且重要的是表现不如行业的公司来说是典型的。
有了这些信息,我们对D&O Home Collection GroupLtd的市销售率低于该行业也就不足为奇了。但是,尚不能保证市销率已达到最低水平,收入反向增长。如果公司不改善营收增长,市销率有可能降至更低的水平。
最后一句话
D&O Home Collection GroupLtd的股价向南走势意味着其市销率目前处于相当低的水平。有人认为,在某些行业中,市销率是衡量价值的较差指标,但它可以是一个有力的商业信心指标。
我们对D&O Home Collection GroupLtd的审查证实,鉴于该行业预计将增长,该公司在过去的中期收入萎缩是其低市销率的关键因素。目前,股东们正在接受低市销率,因为他们承认未来的收入可能也不会带来任何惊喜。鉴于目前的情况,如果最近的中期收入趋势持续下去,股价似乎不太可能在不久的将来双向出现任何重大波动。
那其他风险呢?每家公司都有它们,我们发现了两个你应该知道的D&O Home Collection GroupLtd警告标志。