Jowell Global Ltd. (NASDAQ:JWEL) shares have had a horrible month, losing 38% after a relatively good period beforehand.    For any long-term shareholders, the last month ends a year to forget by locking in a 89% share price decline.  

Even after such a large drop in price, it's still not a stretch to say that Jowell Global's price-to-sales (or "P/S") ratio of 0.4x right now seems quite "middle-of-the-road" compared to the Specialty Retail industry in the United States, where the median P/S ratio is around 0.3x.  However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.    

View our latest analysis for Jowell Global

NasdaqCM:JWEL Price to Sales Ratio vs Industry October 28th 2023

How Jowell Global Has Been Performing

Jowell Global has been doing a good job lately as it's been growing revenue at a solid pace.   It might be that many expect the respectable revenue performance to wane, which has kept the P/S from rising.  Those who are bullish on Jowell Global will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.    

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

Is There Some Revenue Growth Forecasted For Jowell Global?  

In order to justify its P/S ratio, Jowell Global would need to produce growth that's similar to the industry.  

Retrospectively, the last year delivered an exceptional 23% gain to the company's top line.   The latest three year period has also seen an excellent 240% overall rise in revenue, aided by its short-term performance.  Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.  

Comparing that to the industry, which is only predicted to deliver 7.6% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised revenue results.

With this information, we find it interesting that Jowell Global is trading at a fairly similar P/S compared to the industry.  Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.  

The Bottom Line On Jowell Global's P/S

Jowell Global's plummeting stock price has brought its P/S back to a similar region as 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.

To our surprise, Jowell Global revealed its three-year revenue trends aren't contributing to its P/S as much as we would have predicted, given they look better than current industry expectations.  When we see strong revenue with faster-than-industry growth, we can only assume potential risks are what might be placing pressure on the P/S ratio.  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.    

We don't want to rain on the parade too much, but we did also find 3 warning signs for Jowell Global (1 is a bit concerning!) that you need to be mindful 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.

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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.