Ser Educacional S.A.'s (BVMF:SEER3) 28% Jump Shows Its Popularity With Investors

Ser Educacional S.A. (BVMF:SEER3) shares have continued their recent momentum with a 28% gain in the last month alone. Looking back a bit further, it's encouraging to see the stock is up 29% in the last year.

In spite of the firm bounce in price, there still wouldn't be many who think Ser Educacional's price-to-sales (or "P/S") ratio of 0.5x is worth a mention when it essentially matches the median P/S in Brazil's Consumer Services industry. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

Check out our latest analysis for Ser Educacional

What Does Ser Educacional's Recent Performance Look Like?

Ser Educacional could be doing better as it's been growing revenue less than most other companies lately. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. However, if this isn't the case, investors might get caught out paying too much for the stock.

Want the full picture on analyst estimates for the company? Then our free report on Ser Educacional will help you uncover what's on the horizon.

Is There Some Revenue Growth Forecasted For Ser Educacional?

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

If we review the last year of revenue growth, the company posted a worthy increase of 6.9%. Pleasingly, revenue has also lifted 46% in aggregate from three years ago, partly thanks to the last 12 months of growth. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Shifting to the future, estimates from the seven analysts covering the company suggest revenue should grow by 6.8% per year over the next three years. That's shaping up to be similar to the 6.5% per annum growth forecast for the broader industry.

In light of this, it's understandable that Ser Educacional's P/S sits in line with the majority of other companies. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

The Key Takeaway

Ser Educacional appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in 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.

We've seen that Ser Educacional maintains an adequate P/S seeing as its revenue growth figures match the rest of the industry. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. All things considered, if the P/S and revenue estimates contain no major shocks, then it's hard to see the share price moving strongly in either direction in the near future.

Before you take the next step, you should know about the 3 warning signs for Ser Educacional (1 is a bit concerning!) that we have uncovered.

If these risks are making you reconsider your opinion on Ser Educacional, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.