There's No Escaping Titan Mining Corporation's (TSE:TI) Muted Revenues Despite A 27% Share Price Rise

Titan Mining Corporation (TSE:TI) shares have continued their recent momentum with a 27% gain in the last month alone. The last month tops off a massive increase of 210% in the last year.

Although its price has surged higher, Titan Mining may still be sending very bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.9x, since almost half of all companies in the Metals and Mining industry in Canada have P/S ratios greater than 3.5x and even P/S higher than 25x are not unusual. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so limited.

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See our latest analysis for Titan Mining

How Titan Mining Has Been Performing

With revenue growth that's exceedingly strong of late, Titan Mining has been doing very well. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the P/S ratio. If that doesn't eventuate, then existing shareholders have reason to be quite optimistic about the future direction of the share price.

We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Titan Mining's earnings, revenue and cash flow.

Is There Any Revenue Growth Forecasted For Titan Mining?

There's an inherent assumption that a company should far underperform the industry for P/S ratios like Titan Mining's to be considered reasonable.

Retrospectively, the last year delivered an exceptional 46% gain to the company's top line. As a result, it also grew revenue by 17% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been respectable for the company.

Comparing the recent medium-term revenue trends against the industry's one-year growth forecast of 65% shows it's noticeably less attractive.

With this information, we can see why Titan Mining is trading at a P/S lower than the industry. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the wider industry.

What Does Titan Mining's P/S Mean For Investors?

Shares in Titan Mining have risen appreciably however, its P/S is still subdued. 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.

As we suspected, our examination of Titan Mining revealed its three-year revenue trends are contributing to its low P/S, given they look worse than current industry expectations. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.

Don't forget that there may be other risks. For instance, we've identified 2 warning signs for Titan Mining that you should be aware of.

If these risks are making you reconsider your opinion on Titan Mining, 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.