Vobile Group (HKG:3738) saw its stock price plummet 5.06% during Tuesday's intraday trading, a sharp reversal from its recent stellar performance. This downturn comes amid growing concerns about the company's lofty valuation, despite its impressive gains in recent months.

The software company had enjoyed a remarkable run, with its share price surging 86% in the past month alone and an astounding 311% over the past year. However, analysts have raised red flags about Vobile Group's valuation metrics, particularly its price-to-sales (P/S) ratio of 5.8x, which significantly exceeds the industry average of 2.7x for Hong Kong's Software sector.

Market observers suggest that the current selloff may be attributed to investors reassessing the sustainability of Vobile Group's high valuation. Analysts project the company's revenue growth at 22% over the next year, lagging behind the industry's expected 35% expansion. This discrepancy between the company's valuation and its growth prospects appears to have prompted a wave of profit-taking, leading to today's sharp decline. As the market continues to digest these valuation concerns, Vobile Group's stock may face further pressure in the near term.