Home Control International Limited (HKG:1747) shares have had a horrible month, losing 26% after a relatively good period beforehand. For any long-term shareholders, the last month ends a year to forget by locking in a 50% share price decline.
Although its price has dipped substantially, you could still be forgiven for feeling indifferent about Home Control International's P/S ratio of 0.2x, since the median price-to-sales (or "P/S") ratio for the Consumer Durables industry in Hong Kong is also close to 0.4x. 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.
What Does Home Control International's Recent Performance Look Like?
Home Control International has been struggling lately as its revenue has declined faster than most other companies. It might be that many expect the dismal revenue performance to revert back to industry averages soon, which has kept the P/S from falling. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value. If not, then existing shareholders may be a little nervous about the viability of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Home Control International.
Is There Some Revenue Growth Forecasted For Home Control International?
Home Control International'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.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 20%. This means it has also seen a slide in revenue over the longer-term as revenue is down 25% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Turning to the outlook, the next year should generate growth of 9.4% as estimated by the sole analyst watching the company. Meanwhile, the rest of the industry is forecast to expand by 14%, which is noticeably more attractive.
With this information, we find it interesting that Home Control International is trading at a fairly similar P/S compared to the industry. Apparently many investors in the company are less bearish than analysts indicate and aren't willing to let go of their stock right now. These shareholders may be setting themselves up for future disappointment if the P/S falls to levels more in line with the growth outlook.
What Does Home Control International's P/S Mean For Investors?
Following Home Control International's share price tumble, its P/S is just clinging on to the industry median P/S. 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.
When you consider that Home Control International's revenue growth estimates are fairly muted compared to the broader industry, it's easy to see why we consider it unexpected to be trading at its current P/S ratio. When we see companies with a relatively weaker revenue outlook compared to the industry, we suspect the share price is at risk of declining, sending the moderate P/S lower. Circumstances like this present a risk to current and prospective investors who may see share prices fall if the low revenue growth impacts the sentiment.
It is also worth noting that we have found 3 warning signs for Home Control International (2 don't sit too well with us!) that you need to take into consideration.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
Home Control International Limited(HKG: 1747)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26%。对于任何长期股东来说,最后一个月的股价下跌幅度锁定了50%,从而结束了令人难忘的一年。
尽管其价格已大幅下跌,但您对Home Control International的0.2倍市盈率漠不关心仍然是可以原谅的,因为香港耐用消费品行业的中位市销率(或 “市盈率”)也接近0.4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。
Home Control International最近的表现如何?
由于其收入的下降速度快于大多数其他公司,Home Control International最近一直处于困境。许多人可能预计,惨淡的收入表现将很快恢复到行业平均水平,这阻止了市销售率的下降。因此,尽管你可以说股票很便宜,但投资者在将其视为物有所值之前会寻求改善。如果不是,那么现有股东可能会对股价的可行性有些紧张。
如果你想了解分析师对未来的预测,你应该查看我们关于Home Control International的免费报告。
预计Home Control International的收入会增长吗?
Home Control International的市销率对于一家预计只会实现适度增长且重要的是表现与行业持平的公司来说是典型的。
有了这些信息,我们发现有趣的是,与行业相比,Home Control International的交易市销率相当相似。显然,该公司的许多投资者没有分析师所表示的那么看跌,并且不愿意立即放弃股票。如果市销率降至更符合增长前景的水平,这些股东可能会为未来的失望做好准备。
Home Control International的市销率对投资者意味着什么?
继Home Control International股价暴跌之后,其市盈率一直保持在行业市盈率中位数水平。尽管市销率不应成为决定你是否买入股票的决定性因素,但它却是衡量收入预期的有力晴雨表。
当你考虑到与整个行业相比,Home Control International的收入增长预期相当低迷时,不难理解我们为何认为以目前的市销率进行交易是出乎意料的。当我们看到与该行业相比收入前景相对疲软的公司时,我们怀疑股价有下跌的风险,从而使温和的市销售率走低。像这样的情况给当前和潜在的投资者带来了风险,如果低收入增长影响市场情绪,他们可能会看到股价下跌。
还值得注意的是,我们已经发现了 Home Control International 的 3 个警告信号(2 个不要坐得太好!)这是你需要考虑的。