Basetrophy Group Holdings Limited (HKG:8460) shares have had a horrible month, losing 32% after a relatively good period beforehand. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 23% in that time.
Even after such a large drop in price, it's still not a stretch to say that Basetrophy Group Holdings' price-to-sales (or "P/S") ratio of 0.2x right now seems quite "middle-of-the-road" compared to the Construction industry in Hong Kong, where the median P/S ratio is around 0.3x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
How Has Basetrophy Group Holdings Performed Recently?
For example, consider that Basetrophy Group Holdings' financial performance has been poor lately as its revenue has been in decline. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. 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 Basetrophy Group Holdings will help you shine a light on its historical performance.
What Are Revenue Growth Metrics Telling Us About The P/S?
In order to justify its P/S ratio, Basetrophy Group Holdings would need to produce growth that's similar to 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 8.4%. As a result, revenue from three years ago have also fallen 30% overall. 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.
With this information, we find it concerning that Basetrophy Group Holdings 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. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh on the share price eventually.
The Bottom Line On Basetrophy Group Holdings' P/S
Following Basetrophy Group Holdings' share price tumble, its P/S is just clinging on to the industry median P/S. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
We find it unexpected that Basetrophy Group Holdings trades at a P/S ratio that is comparable to the rest of the industry, despite experiencing declining revenues during the medium-term, while the industry as a whole is expected 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 recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
You need to take note of risks, for example - Basetrophy Group Holdings has 3 warning signs (and 2 which are potentially serious) we think you should know about.
If these risks are making you reconsider your opinion on Basetrophy Group Holdings, 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.
Basetrophy Group Holdings Limited(HKG: 8460)的股价经历了一个糟糕的月份,在经历了相对不错的时期之后下跌了32%。过去30天的下跌结束了股东艰难的一年,当时股价下跌了23%。
即使在价格大幅下跌之后,与香港建筑业相比,Basetrophy Group Holdings目前0.2倍的市销率(或 “市盈率”)似乎相当 “处于中间位置”,Basetrophy Group Holdings的市销率中位数约为0.3倍,仍然不费吹灰之力。但是,如果市销率没有合理的基础,投资者可能会忽略明显的机会或潜在的挫折。
Basetrophy 集团控股公司最近表现如何?
例如,假设由于收入下降,Basetrophy Group Holdings的财务表现不佳。许多人可能预计,该公司将在未来一段时间内将令人失望的收入表现抛在脑后,这阻止了市销售率的下降。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?然后,我们关于Basetrophy Group Holdings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P/S的哪些信息?
为了证明其市销率是合理的,Basetrophy Group Holdings需要实现与该行业相似的增长。
有了这些信息,我们发现Basetrophy Group Holdings的市销率与该行业相似。看来大多数投资者都忽视了最近的糟糕增长率,并希望公司的业务前景有所好转。只有最大胆的人才会假设这些价格是可持续的,因为近期收入趋势的延续最终可能会压制股价。
Basetrophy Group Holdings市销率的底线
在Basetrophy Group Holdings股价暴跌之后,其市盈率仅保持在行业市盈率中位数上。仅使用市销售比率来确定是否应该出售股票是不明智的,但它可以作为公司未来前景的实用指南。
我们发现,尽管中期收入下降,但Basetrophy Group Holdings的市销率与该行业其他部门相当,这出乎意料,而整个行业预计将增长。尽管它与行业相匹配,但我们对当前的市销率感到不舒服,因为这种惨淡的收入表现不太可能长期支持更积极的情绪。除非最近的中期状况明显改善,否则投资者将很难接受股价作为公允价值。
例如,你需要注意风险——Basetrophy Group Holdings有3个警告信号(其中2个可能很严重),我们认为你应该知道。
如果这些风险让你重新考虑你对Basetrophy Group Holdings的看法,请浏览我们的高质量股票互动清单,了解还有什么。