With a median price-to-sales (or "P/S") ratio of close to 0.4x in the Specialty Retail industry in the United States, you could be forgiven for feeling indifferent about Petco Health and Wellness Company, Inc.'s (NASDAQ:WOOF) P/S ratio of 0.1x. 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.
See our latest analysis for Petco Health and Wellness Company
What Does Petco Health and Wellness Company's P/S Mean For Shareholders?
There hasn't been much to differentiate Petco Health and Wellness Company's and the industry's revenue growth lately. The P/S ratio is probably moderate because investors think this modest revenue performance will continue. If you like the company, you'd be hoping this can at least be maintained so that you could pick up some stock while it's not quite in favour.
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What Are Revenue Growth Metrics Telling Us About The P/S?
Petco Health and Wellness Company's 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, we see that the company managed to grow revenues by a handy 3.1% last year. Pleasingly, revenue has also lifted 30% in aggregate from three years ago, partly thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing revenues over that time.
Looking ahead now, revenue is anticipated to climb by 1.7% per year during the coming three years according to the analysts following the company. With the industry predicted to deliver 6.9% growth per year, the company is positioned for a weaker revenue result.
With this in mind, we find it intriguing that Petco Health and Wellness Company's P/S is closely matching its industry peers. It seems most investors are ignoring the fairly limited growth expectations and are willing to pay up for exposure to the stock. Maintaining these prices will be difficult to achieve as this level of revenue growth is likely to weigh down the shares eventually.
What We Can Learn From Petco Health and Wellness Company's P/S?
Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
Given that Petco Health and Wellness Company's revenue growth projections are relatively subdued in comparison to the wider industry, it comes as a surprise to see it trading at its current P/S ratio. When we see companies with a relatively weaker revenue outlook compared to the industry, we suspect the share price is at risk of declining, sending the moderate P/S lower. Circumstances like this present a risk to current and prospective investors who may see share prices fall if the low revenue growth impacts the sentiment.
You should always think about risks. Case in point, we've spotted 1 warning sign for Petco Health and Wellness Company you should be aware 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.
在美国专业零售行业,市盈率中位数(或 “市盈率”)接近0.4倍,你对Petco Health and Wellness Company, Inc.漠不关心是可以原谅的。”s(纳斯达克股票代码:WOOF)市盈率为0.1倍。尽管这可能不会引起任何关注,但如果市盈率不合理,投资者可能会错过潜在的机会或忽视迫在眉睫的失望。
查看我们对 Petco 健康与保健公司的最新分析
Petco 健康与保健公司的市盈率对股东意味着什么?
最近,Petco Health and Wellness Company和该行业的收入增长并没有太大的区别。市盈率可能适中,因为投资者认为这种温和的收入表现将继续下去。如果你喜欢这家公司,你希望这种情况至少能保持下去,这样你就可以在它不太受青睐的时候买入一些股票。
想全面了解分析师对公司的估计?然后,我们关于Petco Health and Wellness Company的免费报告将帮助您发现即将发生的事情。
收入增长指标告诉我们有关P/S的哪些信息?
Petco Health and Wellness Company的市盈率对于一家预计只能实现温和增长且重要的是表现与行业一致的公司来说是典型的。
鉴于与整个行业相比,Petco Health and Wellness Company的收入增长预测相对较弱,其以目前的市盈率进行交易令人惊讶。当我们看到与行业相比收入前景相对较弱的公司时,我们怀疑股价有下跌的风险,从而导致温和的市盈率下降。这样的情况会给当前和潜在的投资者带来风险,如果低收入增长影响市场情绪,他们可能会看到股价下跌。
你应该时刻考虑风险。举个例子,我们发现了 Petco Health and Wellness Company 的 1 个警告信号,你应该注意。