908 Devices Inc.（NASDAQ:MASS）的股价似乎不太合理
908 Devices Inc. (NASDAQ:MASS) has a price-to-sales (P/S) ratio of 4x, significantly higher than the industry average of 2.4x, raising concerns about its valuation. Despite strong revenue growth of 38% last year, analysts forecast a 6.4% decline in revenue for the coming year, while the industry is expected to grow by 13%. This discrepancy suggests that investors may be overly optimistic about the company's future prospects. Caution is advised as the high P/S ratio may not be sustainable given the anticipated revenue decline.
When close to half the companies in the Electronic industry in the United States have price-to-sales ratios (or "P/S") below 2.4x, you may consider 908 Devices Inc. (NASDAQ:MASS) as a stock to potentially avoid with its 4x P/S ratio. However, the P/S might be high for a reason and it requires further investigation to determine if it's justified.
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See our latest analysis for 908 Devices
How 908 Devices Has Been Performing
908 Devices certainly has been doing a good job lately as it's been growing revenue more than most other companies. The P/S is probably high because investors think this strong revenue performance will continue. However, if this isn't the case, investors might get caught out paying too much for the stock.
Want the full picture on analyst estimates for the company? Then our free report on 908 Devices will help you uncover what's on the horizon.
Is There Enough Revenue Growth Forecasted For 908 Devices?
908 Devices' P/S ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the industry.
Retrospectively, the last year delivered an exceptional 38% gain to the company's top line. The latest three year period has also seen an excellent 37% overall rise in revenue, aided by its short-term performance. Therefore, it's fair to say the revenue growth recently has been superb for the company.
Looking ahead now, revenue is anticipated to slump, contracting by 6.4% during the coming year according to the four analysts following the company. That's not great when the rest of the industry is expected to grow by 13%.
With this information, we find it concerning that 908 Devices is trading at a P/S higher than the industry. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. Only the boldest would assume these prices are sustainable as these declining revenues are likely to weigh heavily on the share price eventually.
The Bottom Line On 908 Devices' P/S
It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
For a company with revenues that are set to decline in the context of a growing industry, 908 Devices' P/S is much higher than we would've anticipated. Right now we aren't comfortable with the high P/S as the predicted future revenue decline likely to impact the positive sentiment that's propping up the P/S. At these price levels, investors should remain cautious, particularly if things don't improve.
We don't want to rain on the parade too much, but we did also find 1 warning sign for 908 Devices that you need to be mindful of.
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