The Streamline Health Solutions, Inc. (NASDAQ:STRM) share price has softened a substantial 29% over the previous 30 days, handing back much of the gains the stock has made lately. For any long-term shareholders, the last month ends a year to forget by locking in a 84% share price decline.
After such a large drop in price, Streamline Health Solutions may be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.8x, since almost half of all companies in the Healthcare Services industry in the United States have P/S ratios greater than 1.9x and even P/S higher than 5x are not unusual. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.
How Streamline Health Solutions Has Been Performing
Streamline Health Solutions could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. It seems that many are expecting the poor revenue performance to persist, which has repressed the P/S ratio. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value.
Want the full picture on analyst estimates for the company? Then our free report on Streamline Health Solutions will help you uncover what's on the horizon.
What Are Revenue Growth Metrics Telling Us About The Low P/S?
The only time you'd be truly comfortable seeing a P/S as low as Streamline Health Solutions' is when the company's growth is on track to lag the industry.
Retrospectively, the last year delivered virtually the same number to the company's top line as the year before. Although pleasingly revenue has lifted 117% in aggregate from three years ago, notwithstanding the last 12 months. So while the company has done a solid job in the past, it's somewhat concerning to see revenue growth decline as much as it has.
Looking ahead now, revenue is anticipated to climb by 4.1% per year during the coming three years according to the two analysts following the company. That's shaping up to be materially lower than the 14% per annum growth forecast for the broader industry.
In light of this, it's understandable that Streamline Health Solutions' P/S sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Final Word
Streamline Health Solutions' P/S has taken a dip along with its share price. 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.
As expected, our analysis of Streamline Health Solutions' analyst forecasts confirms that the company's underwhelming revenue outlook is a major contributor to its low P/S. Shareholders' pessimism on the revenue prospects for the company seems to be the main contributor to the depressed P/S. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.
Before you settle on your opinion, we've discovered 4 warning signs for Streamline Health Solutions (1 doesn't sit too well with us!) that you should be aware of.
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.
Streamline Health Solutions, Inc.(納斯達克股票代碼:STRM)的股價在過去30天中大幅下跌了29%,收回了該股最近的大部分漲幅。對於任何長期股東來說,最後一個月的股價下跌幅度爲84%,從而結束了令人難忘的一年。
在價格大幅下跌之後,Streamline Health Solutions目前可能正在發出看漲信號,其市銷率(或 “市盈率”)爲0.8倍,因爲美國醫療服務行業幾乎有一半的公司市盈率大於1.9倍,甚至市盈率高於5倍的情況並不少見。但是,市銷率低可能是有原因的,需要進一步調查以確定其是否合理。
Streamline 健康解決方案的表現如何
Streamline Health Solutions可能會做得更好,因爲其收入最近一直在倒退,而大多數其他公司的收入卻出現了正增長。看來許多人預計糟糕的收入表現將持續下去,這抑制了市銷率。因此,儘管你可以說股票很便宜,但投資者在將其視爲物有所值之前會尋求改善。
想全面了解分析師對公司的估計嗎?然後,我們關於Streamline Health Solutions的免費報告將幫助您發現即將發生的事情。
關於低市盈率,收入增長指標告訴我們什麼?
只有當公司的增長有望落後於該行業時,你才能真正放心地看到像Streamline Health Solutions一樣低的市銷率。