Hylink Digital Solutions Co.,Ltd (SHSE:603825) shareholders won't be pleased to see that the share price has had a very rough month, dropping 34% and undoing the prior period's positive performance. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 37% in that time.
After such a large drop in price, Hylink Digital SolutionsLtd's price-to-sales (or "P/S") ratio of 0.4x might make it look like a strong buy right now compared to the wider Media industry in China, where around half of the companies have P/S ratios above 2.7x and even P/S above 7x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/S.
What Does Hylink Digital SolutionsLtd's P/S Mean For Shareholders?
For example, consider that Hylink Digital SolutionsLtd's financial performance has been poor lately as its revenue has been in decline. It might be that many expect the disappointing revenue performance to continue or accelerate, which has repressed the P/S. Those who are bullish on Hylink Digital SolutionsLtd will be hoping that this isn't the case so that they can pick up the stock at a lower valuation.
Although there are no analyst estimates available for Hylink Digital SolutionsLtd, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
Is There Any Revenue Growth Forecasted For Hylink Digital SolutionsLtd?
Hylink Digital SolutionsLtd's P/S ratio would be typical for a company that's expected to deliver very poor growth or even falling revenue, and importantly, perform much worse than the industry.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 34%. This means it has also seen a slide in revenue over the longer-term as revenue is down 29% in total over the last three years. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 20% shows it's an unpleasant look.
In light of this, it's understandable that Hylink Digital SolutionsLtd's P/S would sit below the majority of other companies. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. Even just maintaining these prices could be difficult to achieve as recent revenue trends are already weighing down the shares.
What We Can Learn From Hylink Digital SolutionsLtd's P/S?
Shares in Hylink Digital SolutionsLtd have plummeted and its P/S has followed suit. 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.
Our examination of Hylink Digital SolutionsLtd confirms that the company's shrinking revenue over the past medium-term is a key factor in its low price-to-sales ratio, given the industry is projected to grow. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.
Having said that, be aware Hylink Digital SolutionsLtd is showing 2 warning signs in our investment analysis, you should know about.
If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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在价格大幅下跌之后,与中国整个媒体行业相比,Hylink Digital SolutionsLtd的0.4倍市销率(或 “市盈率”)可能使其看起来像是一个强劲的买盘,在中国,大约一半的公司的市销率高于2.7倍,甚至市盈率高于7倍也很常见。但是,我们需要更深入地挖掘,以确定大幅降低市销率是否有合理的基础。
Hylink Digital SolutionsLtd的市销率对股东意味着什么?
例如,假设由于收入下降,Hylink Digital SolutionsLtd的财务表现不佳。许多人可能预计,令人失望的收入表现将持续或加速,这抑制了市销率。那些看好Hylink Digital SolutionsLtd的人会希望情况并非如此,这样他们才能以较低的估值买入该股。
尽管没有分析师对Hylink Digital SolutionsLtd的估计,但请看一下这个免费的数据丰富的可视化图表,看看该公司的收益、收入和现金流是如何积累的。
预计Hylink Digital SolutionsLtd的收入会增长吗?
Hylink Digital SolutionsLtd的市销率对于一家预计增长非常糟糕甚至收入下降的公司来说是典型的,更重要的是,其表现将比行业差得多。
有鉴于此,可以理解Hylink Digital SolutionsLtd的市销率将低于其他多数公司。但是,尚不能保证市销率已达到最低水平,收入反向增长。即使仅仅维持这些价格也可能难以实现,因为最近的收入趋势已经压低了股价。
我们可以从Hylink Digital SolutionsLtd的市销率中学到什么?
Hylink Digital SolutionsLtd的股价暴跌,其市销率也随之下跌。尽管市销率不应该成为决定你是否买入股票的决定性因素,但它是衡量收入预期的有力晴雨表。
我们对Hylink Digital SolutionsLtd的审查证实,鉴于该行业预计将增长,该公司在过去的中期收入萎缩是其低市销率的关键因素。在现阶段,投资者认为,收入改善的可能性不足以证明更高的市销率是合理的。鉴于目前的情况,如果最近的中期收入趋势持续下去,股价似乎不太可能在不久的将来双向出现任何重大波动。
话虽如此,请注意,Hylink Digital SolutionsLtd在我们的投资分析中显示了两个警告信号,你应该知道。