Investors Aren't Entirely Convinced By Rosenbauer International AG's (VIE:ROS) Revenues

It's not a stretch to say that Rosenbauer International AG's (VIE:ROS) price-to-sales (or "P/S") ratio of 0.2x right now seems quite "middle-of-the-road" for companies in the Machinery industry in Austria, where the median P/S ratio is around 0.4x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

Check out our latest analysis for Rosenbauer International

How Rosenbauer International Has Been Performing

Rosenbauer International could be doing better as it's been growing revenue less than most other companies lately. It might be that many expect the uninspiring revenue performance to strengthen positively, which has kept the P/S ratio from falling. If not, then existing shareholders may be a little nervous about the viability of the share price.

Keen to find out how analysts think Rosenbauer International's future stacks up against the industry? In that case, our free report is a great place to start.

How Is Rosenbauer International's Revenue Growth Trending?

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

Taking a look back first, we see that the company managed to grow revenues by a handy 7.5% last year. Ultimately though, it couldn't turn around the poor performance of the prior period, with revenue shrinking 5.1% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.

Looking ahead now, revenue is anticipated to climb by 8.3% per year during the coming three years according to the two analysts following the company. With the industry only predicted to deliver 3.7% per year, the company is positioned for a stronger revenue result.

With this information, we find it interesting that Rosenbauer International is trading at a fairly similar P/S compared to the industry. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.

The Key Takeaway

Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

Looking at Rosenbauer International's analyst forecasts revealed that its superior revenue outlook isn't giving the boost to its P/S that we would've expected. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. However, if you agree with the analysts' forecasts, you may be able to pick up the stock at an attractive price.

Before you settle on your opinion, we've discovered 2 warning signs for Rosenbauer International (1 is concerning!) that you should be aware of.

If you're unsure about the strength of Rosenbauer International's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.