Nasdaq
华尔街日报Market Participants Recognise Hyulim ROBOT Co.,Ltd.'s (KOSDAQ:090710) Revenues Pushing Shares 25% Higher
Hyulim ROBOT Co.,Ltd. (KOSDAQ:090710) shares have continued their recent momentum with a 25% gain in the last month alone. This latest share price bounce rounds out a remarkable 356% gain over the last twelve months.
Since its price has surged higher, you could be forgiven for thinking Hyulim ROBOTLtd is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 3.5x, considering almost half the companies in Korea's Machinery industry have P/S ratios below 1.2x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/S.
See our latest analysis for Hyulim ROBOTLtd
What Does Hyulim ROBOTLtd's P/S Mean For Shareholders?
Hyulim ROBOTLtd certainly has been doing a great job lately as it's been growing its revenue at a really rapid pace. The P/S ratio is probably high because investors think this strong revenue growth will be enough to outperform the broader industry in the near future. If not, then existing shareholders might be a little nervous about the viability of the share price.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Hyulim ROBOTLtd will help you shine a light on its historical performance.Is There Enough Revenue Growth Forecasted For Hyulim ROBOTLtd?
In order to justify its P/S ratio, Hyulim ROBOTLtd would need to produce outstanding growth that's well in excess of the industry.
Retrospectively, the last year delivered an exceptional 120% gain to the company's top line. Spectacularly, three year revenue growth has ballooned by several orders of magnitude, thanks in part to the last 12 months of revenue growth. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.
When compared to the industry's one-year growth forecast of 25%, the most recent medium-term revenue trajectory is noticeably more alluring
With this information, we can see why Hyulim ROBOTLtd is trading at such a high P/S compared to the industry. Presumably shareholders aren't keen to offload something they believe will continue to outmanoeuvre the wider industry.
What We Can Learn From Hyulim ROBOTLtd's P/S?
The strong share price surge has lead to Hyulim ROBOTLtd's P/S soaring as well. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
As we suspected, our examination of Hyulim ROBOTLtd revealed its three-year revenue trends are contributing to its high P/S, given they look better than current industry expectations. Right now shareholders are comfortable with the P/S as they are quite confident revenue aren't under threat. Barring any significant changes to the company's ability to make money, the share price should continue to be propped up.
Having said that, be aware Hyulim ROBOTLtd 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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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.