Further Upside For Jayud Global Logistics Limited (NASDAQ:JYD) Shares Could Introduce Price Risks After 29% Bounce

Jayud Global Logistics Limited (NASDAQ:JYD) shares have had a really impressive month, gaining 29% after a shaky period beforehand. But the last month did very little to improve the 68% share price decline over the last year.

Although its price has surged higher, there still wouldn't be many who think Jayud Global Logistics' price-to-sales (or "P/S") ratio of 0.3x is worth a mention when the median P/S in the United States' Logistics industry is similar at about 0.6x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

See our latest analysis for Jayud Global Logistics

How Jayud Global Logistics Has Been Performing

As an illustration, revenue has deteriorated at Jayud Global Logistics over the last year, which is not ideal at all. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. If not, then existing shareholders may be a little nervous about the viability of the share price.

Although there are no analyst estimates available for Jayud Global Logistics, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

Do Revenue Forecasts Match The P/S Ratio?

Jayud Global Logistics' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.

Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 24%. However, a few very strong years before that means that it was still able to grow revenue by an impressive 71% in total over the last three years. Accordingly, while they would have preferred to keep the run going, shareholders would definitely welcome the medium-term rates of revenue growth.

When compared to the industry's one-year growth forecast of 5.7%, the most recent medium-term revenue trajectory is noticeably more alluring

In light of this, it's curious that Jayud Global Logistics' P/S sits in line with the majority of other companies. Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.

What Does Jayud Global Logistics' P/S Mean For Investors?

Jayud Global Logistics' stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

We didn't quite envision Jayud Global Logistics' P/S sitting in line with the wider industry, considering the revenue growth over the last three-year is higher than the current industry outlook. There could be some unobserved threats to revenue preventing the P/S ratio from matching this positive performance. It appears some are indeed anticipating revenue instability, because the persistence of these recent medium-term conditions would normally provide a boost to the share price.

There are also other vital risk factors to consider and we've discovered 4 warning signs for Jayud Global Logistics (3 can't be ignored!) that you should be aware of before investing here.

If you're unsure about the strength of Jayud Global Logistics' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.