Asiaray Media Group Limited (HKG:1993) shareholders that were waiting for something to happen have been dealt a blow with a 34% share price drop in the last month. For any long-term shareholders, the last month ends a year to forget by locking in a 59% share price decline.
Even after such a large drop in price, there still wouldn't be many who think Asiaray Media Group's price-to-sales (or "P/S") ratio of 0.2x is worth a mention when the median P/S in Hong Kong's Media 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 Asiaray Media Group Has Been Performing
For example, consider that Asiaray Media Group's financial performance has been poor lately as its revenue has been in decline. Perhaps investors believe the recent revenue performance is enough to keep in line with the industry, which is keeping the P/S from dropping off. 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 Asiaray Media Group will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The P/S?
There's an inherent assumption that a company should be matching the industry for P/S ratios like Asiaray Media Group's to be considered reasonable.
Retrospectively, the last year delivered a frustrating 9.0% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 3.5% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Comparing that to the industry, which is predicted to deliver 14% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.
With this information, we find it concerning that Asiaray Media Group is trading at a fairly similar P/S compared to the industry. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
The Key Takeaway
Asiaray Media Group's plummeting stock price has brought its P/S back to a similar region as the rest of the industry. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
Our look at Asiaray Media Group revealed its shrinking revenues over the medium-term haven't impacted the P/S as much as we anticipated, given the industry is set to grow. Even though it matches the industry, we're uncomfortable with the current P/S ratio, as this dismal revenue performance is unlikely to support a more positive sentiment for long. Unless the the circumstances surrounding the recent medium-term improve, it wouldn't be wrong to expect a a difficult period ahead for the company's shareholders.
Before you take the next step, you should know about the 3 warning signs for Asiaray Media Group (1 is potentially serious!) that we have uncovered.
If these risks are making you reconsider your opinion on Asiaray Media Group, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
上个月股价下跌了34%,这给那些等待事情发生的Asiaray Media Group Limited(HKG: 1993)的股东受到了打击。对于任何长期股东来说,最后一个月的股价下跌幅度为59%,从而结束了令人难忘的一年。
即使价格下跌如此之大,当香港媒体行业的市盈率中位数约为0.6倍时,仍然没有多少人认为Asiaray Media Group的0.2倍市销率(或 “市销率”)值得一提。尽管这可能不会引起任何关注,但如果市销率不合理,投资者可能会错过潜在的机会或无视迫在眉睫的失望情绪。
Asiaray Media Group 的表现如何
例如,假设Asiaray Media Group最近由于收入下降而财务表现不佳。也许投资者认为最近的收入表现足以与该行业保持一致,这阻止了市销率的下降。如果你喜欢这家公司,你至少希望情况确实如此,这样你就有可能在它不太受青睐的情况下买入一些股票。
想全面了解公司的收益、收入和现金流吗?那么我们关于Asiaray Media Group的免费报告将帮助您了解其历史表现。
收入增长指标告诉我们有关市销率的哪些信息?
人们固有的假设是,公司应该与行业相提并论,这样像Asiaray Media Group这样的市销率才算合理。