Yee Hop Holdings Limited (HKG:1662) shares have continued their recent momentum with a 34% gain in the last month alone. Looking back a bit further, it's encouraging to see the stock is up 51% in the last year.
After such a large jump in price, you could be forgiven for thinking Yee Hop Holdings is a stock not worth researching with a price-to-sales ratios (or "P/S") of 1x, considering almost half the companies in Hong Kong's Construction industry have P/S ratios below 0.3x. However, the P/S might be high for a reason and it requires further investigation to determine if it's justified.
View our latest analysis for Yee Hop Holdings
How Yee Hop Holdings Has Been Performing
Yee Hop Holdings has been doing a good job lately as it's been growing revenue at a solid pace. It might be that many expect the respectable revenue performance to beat most other companies over the coming period, which has increased investors' willingness to pay up for the stock. However, if this isn't the case, investors might get caught out paying too much for the stock.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Yee Hop Holdings will help you shine a light on its historical performance.
Do Revenue Forecasts Match The High P/S Ratio?
The only time you'd be truly comfortable seeing a P/S as high as Yee Hop Holdings' is when the company's growth is on track to outshine the industry.
If we review the last year of revenue growth, the company posted a worthy increase of 9.8%. Ultimately though, it couldn't turn around the poor performance of the prior period, with revenue shrinking 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.
In contrast to the company, the rest of the industry is expected to grow by 13% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
With this in mind, we find it worrying that Yee Hop Holdings' P/S exceeds that of its industry peers. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. There's a very good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
The Final Word
The large bounce in Yee Hop Holdings' shares has lifted the company's P/S handsomely. We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
Our examination of Yee Hop Holdings revealed its shrinking revenue over the medium-term isn't resulting in a P/S as low as we expected, given the industry is set to grow. Right now we aren't comfortable with the high P/S as this revenue performance is highly unlikely to support such positive sentiment for long. Should recent medium-term revenue trends persist, it would pose a significant risk to existing shareholders' investments and prospective investors will have a hard time accepting the current value of the stock.
Don't forget that there may be other risks. For instance, we've identified 3 warning signs for Yee Hop Holdings (1 can't be ignored) you should be aware of.
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.
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.
Yee Hop Holdings Limited (HKG:1662)の株は、直近1か月間で34%上昇した勢いを維持している。1年前と比べ、株価は51%上昇しており、前向きな兆しを見せている。
株価が急上昇した後、香港建設業のほとんどの企業がP/S比率が0.3x未満であることを考えると、Yee Hop HoldingsのP/S比率が1xであるような株について調べる価値があるかどうか疑問に思うことができます。ただし、P/S比率が高い理由を調査し、それが正当化されているかどうかを判断するためには、さらなる調査が必要です。
Yee Hop Holdingsの最新の分析を見る
Yee Hop Holdingsの業績状況
Yee Hop Holdingsは、売上高の成長を堅調に続けており、最近の多くの投資家がこの勢いが続くことを期待して、この期間中ほとんどの他社を上回る売上高実績を報告することを期待しているため、株価を高く評価しようとする傾向がある。ただし、こうした期待があっても、それが現実に反映されない場合、投資家は過度に高い値段を払うことになる可能性があります。
Yee Hop Holdingsの収益、売上高、キャッシュフローに関する詳細な情報を知りたい場合は、当社の無料レポートをご覧ください。
売上高予想は、高いP/S比率と一致しているか?
Yee Hop Holdingsと同程度に高いP/Sが見られるのは、同社の成長が業界を上回る見通しがある場合だけです。
業績のマイナス成長率が続いているにもかかわらず、Yee Hop HoldingsのP/Sが業界の同僚よりも高いことは懸念すべき問題です。ある調査によると、多くの投資家が現在のように強気で、どんな価格でも自社株式を譲らないようです。しかし、マイナス成長率に対してP/S比率がより現実的な水準に下がってしまった場合、株主は失望することになる可能性が非常に高いです。
最終的に、Yee Hop Holdingsの株価は大幅に上昇し、P/S比率も大幅に上昇しました。高いP/S比率は、単に企業評価の手法としてではなく、現在の投資家の意見や将来の期待を評価するために使用されるべきです。
Yee Hop Holdingsを調べたところ、中期的な売上高の減少にもかかわらず、業界全体の成長が見込めるため、P/S比率が予想よりも高いことに違和感を覚えました。現在の売上高実績では、このような好ましい評価を長期的に維持することは非常に困難だと考えます。
Yee Hop Holdingsの株式が抱えるリスクは他にもあります。たとえば、弊社ではYee Hop Holdingsに3つの警告サインを特定しました(1つは無視できません)。中期的な売上高トレンドが続いている場合、株主がリスクを抱えることになり、潜在的な投資家は株式の現在価値を受け入れるのが難しくなる可能性があります。