iClick Interactive Asia Group Limited (NASDAQ:ICLK) Doing What It Can To Lift Shares
You may think that with a price-to-sales (or "P/S") ratio of 0.1x iClick Interactive Asia Group Limited (NASDAQ:ICLK) is a stock worth checking out, seeing as almost half of all the Media companies in the United States have P/S ratios greater than 0.9x and even P/S higher than 3x aren't out of the ordinary. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.
See our latest analysis for iClick Interactive Asia Group
What Does iClick Interactive Asia Group's Recent Performance Look Like?
iClick Interactive Asia Group 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 iClick Interactive Asia Group will help you uncover what's on the horizon.
Do Revenue Forecasts Match The Low P/S Ratio?
iClick Interactive Asia Group's P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform 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 45%. As a result, revenue from three years ago have also fallen 15% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Turning to the outlook, the next three years should generate growth of 16% per annum as estimated by the only analyst watching the company. Meanwhile, the rest of the industry is forecast to only expand by 4.3% per year, which is noticeably less attractive.
In light of this, it's peculiar that iClick Interactive Asia Group's P/S sits below the majority of other companies. It looks like most investors are not convinced at all that the company can achieve future growth expectations.
The Bottom Line On iClick Interactive Asia Group's P/S
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.
iClick Interactive Asia Group's analyst forecasts revealed that its superior revenue outlook isn't contributing to its P/S anywhere near as much as we would have predicted. There could be some major risk factors that are placing downward pressure on the P/S ratio. It appears the market could be anticipating revenue instability, because these conditions should normally provide a boost to the share price.
Plus, you should also learn about these 4 warning signs we've spotted with iClick Interactive Asia Group (including 2 which are a bit concerning).
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).
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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.
