The Progressive Path Group Holdings Limited (HKG:1581) share price has done very well over the last month, posting an excellent gain of 27%. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 32% in the last twelve months.
In spite of the firm bounce in price, you could still be forgiven for feeling indifferent about Progressive Path Group Holdings' P/S ratio of 0.1x, since the median price-to-sales (or "P/S") ratio for the Trade Distributors industry in Hong Kong is also close to 0.6x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
How Progressive Path Group Holdings Has Been Performing
Revenue has risen firmly for Progressive Path Group Holdings recently, which is pleasing to see. One possibility is that the P/S is moderate because investors think this respectable revenue growth might not be enough to outperform the broader industry in the near future. Those who are bullish on Progressive Path Group Holdings will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Progressive Path Group Holdings' earnings, revenue and cash flow.
Do Revenue Forecasts Match The P/S Ratio?
In order to justify its P/S ratio, Progressive Path Group Holdings would need to produce growth that's similar to the industry.
Retrospectively, the last year delivered a decent 12% gain to the company's revenues. The latest three year period has also seen an excellent 43% overall rise in revenue, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing revenues over that time.
Comparing the recent medium-term revenue trends against the industry's one-year growth forecast of 27% shows it's noticeably less attractive.
With this in mind, we find it intriguing that Progressive Path Group Holdings' P/S is comparable to that of its industry peers. Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now. Maintaining these prices will be difficult to achieve as a continuation of recent revenue trends is likely to weigh down the shares eventually.
The Final Word
Progressive Path Group Holdings' stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. 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 Progressive Path Group Holdings revealed its poor three-year revenue trends aren't resulting in a lower P/S as per our expectations, given they look worse than current industry outlook. Right now we are uncomfortable with the P/S as this revenue performance isn't likely to support a more positive sentiment for long. Unless the recent medium-term conditions improve, it's hard to accept the current share price as fair value.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Progressive Path Group Holdings, and understanding should be part of your investment process.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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.
Progressive Path Group Holdings Limited(HKG: 1581)的股价在上个月表现良好,涨幅为27%。并非所有股东都会感到欢欣鼓舞,因为股价在过去十二个月中仍然下跌了32%,非常令人失望。
尽管价格稳步反弹,但你对Progressive Path Group Holdings的0.1倍市销率漠不关心仍然是可以原谅的,因为香港贸易分销商行业的中位数市销率(或 “市盈率”)也接近0.6倍。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。
Progressive Path 集团控股公司的表现如何
最近,Progressive Path Group Holdings的收入稳步增长,这令人高兴。一种可能性是市销率适中,因为投资者认为这种可观的收入增长可能不足以在不久的将来跑赢整个行业。那些看好Progressive Path Group Holdings的人希望情况并非如此,这样他们就可以以较低的估值买入该股。
我们没有分析师的预测,但您可以查看我们关于Progressive Path Group Holdings收益、收入和现金流的免费报告,了解最近的趋势如何为公司未来做好准备。
收入预测与市销率相匹配吗?
为了证明其市销率是合理的,Progressive Path Group Holdings需要实现与该行业相似的增长。
考虑到这一点,我们发现有趣的是,Progressive Path Group Holdings的市销率与业内同行相当。显然,该公司的许多投资者并不像最近所表明的那样看跌,并且不愿意立即放弃股票。维持这些价格将很难实现,因为近期收入趋势的延续最终可能会压低股价。
最后一句话
Progressive Path Group Holdings的股票最近势头强劲,这使其市销率与业内其他公司相比有所上升。通常,在做出投资决策时,我们谨慎行事,不要过多地考虑市售比率,尽管这可以揭示其他市场参与者对公司的看法。
我们对Progressive Path Group Holdings的审查显示,其糟糕的三年收入趋势并未导致市销率低于我们的预期,因为这些趋势看起来不如当前的行业前景。目前,我们对市销率感到不舒服,因为这种收入表现不太可能长期支撑更积极的情绪。除非最近的中期状况有所改善,否则很难接受当前的股价作为公允价值。
始终有必要考虑永远存在的投资风险幽灵。我们已经向Progressive Path Group Holdings发现了一个警告信号,理解应该是您投资过程的一部分。