Market Participants Recognise Ningbo Joy Intelligent Logistics Technology Co.,Ltd.'s (SZSE:301198) Revenues Pushing Shares 27% Higher

Despite an already strong run, Ningbo Joy Intelligent Logistics Technology Co.,Ltd. (SZSE:301198) shares have been powering on, with a gain of 27% in the last thirty days. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 14% in the last twelve months.

After such a large jump in price, given around half the companies in China's Packaging industry have price-to-sales ratios (or "P/S") below 2.1x, you may consider Ningbo Joy Intelligent Logistics TechnologyLtd as a stock to avoid entirely with its 5.7x P/S ratio. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.

View our latest analysis for Ningbo Joy Intelligent Logistics TechnologyLtd

How Ningbo Joy Intelligent Logistics TechnologyLtd Has Been Performing

Ningbo Joy Intelligent Logistics TechnologyLtd hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. It might be that many expect the dour revenue performance to recover substantially, which has kept the P/S from collapsing. However, if this isn't the case, investors might get caught out paying too much for the stock.

Keen to find out how analysts think Ningbo Joy Intelligent Logistics TechnologyLtd's future stacks up against the industry? In that case, our free report is a great place to start.

How Is Ningbo Joy Intelligent Logistics TechnologyLtd's Revenue Growth Trending?

There's an inherent assumption that a company should far outperform the industry for P/S ratios like Ningbo Joy Intelligent Logistics TechnologyLtd's to be considered reasonable.

In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 20%. The last three years don't look nice either as the company has shrunk revenue by 6.8% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

Turning to the outlook, the next year should generate growth of 41% as estimated by the only analyst watching the company. Meanwhile, the rest of the industry is forecast to only expand by 15%, which is noticeably less attractive.

With this in mind, it's not hard to understand why Ningbo Joy Intelligent Logistics TechnologyLtd's P/S is high relative to its industry peers. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

What Does Ningbo Joy Intelligent Logistics TechnologyLtd's P/S Mean For Investors?

Shares in Ningbo Joy Intelligent Logistics TechnologyLtd have seen a strong upwards swing lately, which has really helped boost its P/S figure. 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.

Our look into Ningbo Joy Intelligent Logistics TechnologyLtd shows that its P/S ratio remains high on the merit of its strong future revenues. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. Unless these conditions change, they will continue to provide strong support to the share price.

Don't forget that there may be other risks. For instance, we've identified 3 warning signs for Ningbo Joy Intelligent Logistics TechnologyLtd (1 is a bit concerning) you should be aware of.

If these risks are making you reconsider your opinion on Ningbo Joy Intelligent Logistics TechnologyLtd, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.