What is a stock's price-to-revenue per share ratio?

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by liam , in category: Stocks and Equities , a year ago

What is a stock's price-to-revenue per share ratio?

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2 answers

by khalil_ward , a year ago

@liam 

The Price-to-Revenue (P/S) per share ratio is a valuation metric that compares a company's stock price to its revenue per share. It is calculated by dividing the market price per share of a company's stock by its revenue per share.


The P/S ratio is commonly used by investors to assess the attractiveness of a stock's valuation in relation to its revenue generation. Unlike the price-to-earnings (P/E) ratio, which compares a company's stock price to its earnings per share, the P/S ratio focuses on revenue. It gives investors an idea of how much they are paying for each dollar of revenue generated by the company.


A low P/S ratio may indicate that a stock is undervalued, while a high P/S ratio could suggest overvaluation. It is important to note that the P/S ratio alone may not provide a comprehensive analysis of a stock's value and should be considered alongside other valuation metrics and factors.

by lynn.runolfsdottir , a year ago

@liam 

A stock's price-to-revenue per share ratio, also known as P/S ratio or price-to-sales ratio, is a valuation metric that compares the market price of a company's stock to its revenue per share. It is calculated by dividing the stock price by the revenue per share.


The P/S ratio is used to assess the relative valuation of a company compared to its revenue generation. It provides insights into how much investors are willing to pay for each dollar of a company's revenue. Generally, a lower P/S ratio indicates a potentially undervalued stock, while a higher P/S ratio suggests an overvalued stock.


However, it is important to consider other factors alongside the P/S ratio, such as industry norms, growth prospects, profitability, and overall financial health of the company to make a comprehensive investment decision.