MCI Onehealth Technologies Inc.'s (TSE:DRDR) Stock Retreats 57% But Revenues Haven't Escaped The Attention Of Investors

Unfortunately for some shareholders, the MCI Onehealth Technologies Inc. (TSE:DRDR) share price has dived 57% in the last thirty days, prolonging recent pain. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 85% loss during that time.

In spite of the heavy fall in price, it's still not a stretch to say that MCI Onehealth Technologies' price-to-sales (or "P/S") ratio of 0.2x right now seems quite "middle-of-the-road" compared to the Healthcare industry in Canada, where the median P/S ratio is around 0.5x. 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 MCI Onehealth Technologies

How MCI Onehealth Technologies Has Been Performing

With revenue growth that's inferior to most other companies of late, MCI Onehealth Technologies has been relatively sluggish. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.

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

Do Revenue Forecasts Match The P/S Ratio?

The only time you'd be comfortable seeing a P/S like MCI Onehealth Technologies' is when the company's growth is tracking the industry closely.

Taking a look back first, we see that the company managed to grow revenues by a handy 11% last year. Revenue has also lifted 15% 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 respectable for the company.

Turning to the outlook, the next year should generate growth of 16% as estimated by the only analyst watching the company. That's shaping up to be similar to the 18% growth forecast for the broader industry.

With this in mind, it makes sense that MCI Onehealth Technologies' P/S is closely matching its industry peers. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

What Does MCI Onehealth Technologies' P/S Mean For Investors?

Following MCI Onehealth Technologies' share price tumble, its P/S is just clinging on to the industry median P/S. 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.

We've seen that MCI Onehealth Technologies 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. If all things remain constant, the possibility of a drastic share price movement remains fairly remote.

It's always necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with MCI Onehealth Technologies (at least 4 which are potentially serious), and understanding these should be part of your investment process.

If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).

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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.