Unfortunately for some shareholders, the Shaanxi Broadcast & TV Network Intermediary(Group)Co.,Ltd. (SHSE:600831) share price has dived 29% in the last thirty days, prolonging recent pain. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 40% share price drop.

Since its price has dipped substantially, Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd may be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 1x, since almost half of all companies in the Media industry in China have P/S ratios greater than 2.3x and even P/S higher than 5x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

What Does Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd's Recent Performance Look Like?

As an illustration, revenue has deteriorated at Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd 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. However, if this doesn't eventuate then existing shareholders may be feeling optimistic about the future direction of the share price.

How Is Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd's Revenue Growth Trending?

In order to justify its P/S ratio, Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd would need to produce sluggish growth that's trailing the industry.

Retrospectively, the last year delivered a frustrating 16% decrease to the company's top line. This has erased any of its gains during the last three years, with practically no change in revenue being achieved in total. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.

Comparing that to the industry, which is predicted to deliver 20% growth in the next 12 months, the company's momentum is weaker, based on recent medium-term annualised revenue results.

With this in consideration, it's easy to understand why Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd's P/S falls short of the mark set by its industry peers. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the wider industry.

What We Can Learn From Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd's P/S?

The southerly movements of Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd's shares means its P/S is now sitting at a pretty low level. 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 Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd confirms that the company's revenue trends over the past three-year years are a key factor in its low price-to-sales ratio, as we suspected, given they fall short of current industry expectations. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. If recent medium-term revenue trends continue, it's hard to see the share price experience a reversal of fortunes anytime soon.

There are also other vital risk factors to consider before investing and we've discovered 2 warning signs for Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd that you should be aware of.

If these risks are making you reconsider your opinion on Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.