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)的股價在上個月表現良好,漲幅爲27%。並非所有股東都會感到歡欣鼓舞,因爲股價在過去十二個月中仍然下跌了32%,非常令人失望。
儘管價格穩步反彈,但你對Progressive Path Group Holdings的0.1倍市銷率漠不關心仍然是可以原諒的,因爲香港貿易分銷商行業的中位數市銷率(或 “市盈率”)也接近0.6倍。但是,如果市銷率沒有合理的基礎,投資者可能會忽略明顯的機會或潛在的挫折。
Progressive Path 集團控股公司的表現如何
最近,Progressive Path Group Holdings的收入穩步增長,這令人高興。一種可能性是市銷率適中,因爲投資者認爲這種可觀的收入增長可能不足以在不久的將來跑贏整個行業。那些看好Progressive Path Group Holdings的人希望情況並非如此,這樣他們就可以以較低的估值買入該股。
我們沒有分析師的預測,但您可以查看我們關於Progressive Path Group Holdings收益、收入和現金流的免費報告,了解最近的趨勢如何爲公司未來做好準備。
收入預測與市銷率相匹配嗎?
爲了證明其市銷率是合理的,Progressive Path Group Holdings需要實現與該行業相似的增長。
考慮到這一點,我們發現有趣的是,Progressive Path Group Holdings的市銷率與業內同行相當。顯然,該公司的許多投資者並不像最近所表明的那樣看跌,並且不願意立即放棄股票。維持這些價格將很難實現,因爲近期收入趨勢的延續最終可能會壓低股價。
最後一句話
Progressive Path Group Holdings的股票最近勢頭強勁,這使其市銷率與業內其他公司相比有所上升。通常,在做出投資決策時,我們謹慎行事,不要過多地考慮市售比率,儘管這可以揭示其他市場參與者對公司的看法。
我們對Progressive Path Group Holdings的審查顯示,其糟糕的三年收入趨勢並未導致市銷率低於我們的預期,因爲這些趨勢看起來不如當前的行業前景。目前,我們對市銷率感到不舒服,因爲這種收入表現不太可能長期支撐更積極的情緒。除非最近的中期狀況有所改善,否則很難接受當前的股價作爲公允價值。
始終有必要考慮永遠存在的投資風險幽靈。我們已經向Progressive Path Group Holdings發現了一個警告信號,理解應該是您投資過程的一部分。