Shares of Ruihe Data Technology Holdings Limited (HKG:3680) plummeted by 5.69% on Thursday, November 8th, following recent concerns over the company's valuation and growth outlook raised by analysts.

While Ruihe Data's stock has rallied impressively in recent months, gaining 35% and 52% over the past month and year respectively, analysts are questioning whether the company's high price-to-sales (P/S) ratio of 1.8x is justified by its current growth rates.

The main concern stems from Ruihe Data's slowing revenue growth. Over the past three years, the company's annual revenue growth has averaged around 24%, lower than the industry's expected growth rate of 9.6% for the next year. With the company trading at a P/S multiple significantly higher than most peers in the IT industry, some analysts believe investors may be setting themselves up for disappointment if Ruihe Data's growth rates do not improve markedly in the near future.