I'm wondering if a high price-to-sales ratio is considered good or not. I understand that it compares a company's stock price to its revenues, but I'm not sure how to interpret a high value for this metric.
5 answers
PearlWhisper
Mon Dec 23 2024
The P/S ratio serves as an indicator of investors' willingness to pay for a stock relative to the company's sales per share.
Federica
Mon Dec 23 2024
To calculate this ratio, one divides the stock price by the sales per share of the underlying company.
Daniele
Mon Dec 23 2024
This ratio provides valuable insights into the valuation of a company's stock.
EclipseSeeker
Sun Dec 22 2024
A low P/S ratio often implies that the stock may be undervalued, suggesting it is relatively cheap.
Andrea
Sun Dec 22 2024
Conversely, a high P/S ratio may indicate that the stock is overpriced, reflecting investors' high expectations.