Yahoo Finance Even With A 35% Surge, Cautious Investors Are Not Rewarding D-Market Elektronik Hizmetler ve Ticaret A.S.'s (NASDAQ:HEPS) Performance Completely
D-Market Elektronik Hizmetler ve Ticaret A.S. (NASDAQ:HEPS) shareholders are no doubt pleased to see that the share price has bounced 35% in the last month, although it is still struggling to make up recently lost ground. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 48% over that time.
Even after such a large jump in price, there still wouldn't be many who think D-Market Elektronik Hizmetler ve Ticaret's price-to-sales (or "P/S") ratio of 0.4x is worth a mention when the median P/S in the United States' Multiline Retail industry is similar at about 0.7x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
View our latest analysis for D-Market Elektronik Hizmetler ve Ticaret
What Does D-Market Elektronik Hizmetler ve Ticaret's Recent Performance Look Like?
D-Market Elektronik Hizmetler ve Ticaret certainly has been doing a good job lately as it's been growing revenue more than most other companies. It might be that many expect the strong revenue performance to wane, which has kept the P/S ratio from rising. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.
Keen to find out how analysts think D-Market Elektronik Hizmetler ve Ticaret's future stacks up against the industry? In that case, our free report is a great place to start.
Is There Some Revenue Growth Forecasted For D-Market Elektronik Hizmetler ve Ticaret?
In order to justify its P/S ratio, D-Market Elektronik Hizmetler ve Ticaret would need to produce growth that's similar to the industry.
Retrospectively, the last year delivered an exceptional 113% 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.
Turning to the outlook, the next three years should generate growth of 39% per annum as estimated by the four analysts watching the company. Meanwhile, the rest of the industry is forecast to only expand by 12% per year, which is noticeably less attractive.
With this information, we find it interesting that D-Market Elektronik Hizmetler ve Ticaret is trading at a fairly similar P/S compared to the industry. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.
The Final Word
D-Market Elektronik Hizmetler ve Ticaret's stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. 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.
We've established that D-Market Elektronik Hizmetler ve Ticaret currently trades on a lower than expected P/S since its forecasted revenue growth is higher than the wider industry. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. This uncertainty seems to be reflected in the share price which, while stable, could be higher given the revenue forecasts.
We don't want to rain on the parade too much, but we did also find 2 warning signs for D-Market Elektronik Hizmetler ve Ticaret that you need to be mindful 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
