Investors Interested In Xi'an Bright Laser Technologies Co.,Ltd.'s (SHSE:688333) Revenues

When close to half the companies in the Machinery industry in China have price-to-sales ratios (or "P/S") below 3x, you may consider Xi'an Bright Laser Technologies Co.,Ltd. (SHSE:688333) as a stock to avoid entirely with its 9.3x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.

View our latest analysis for Xi'an Bright Laser TechnologiesLtd

How Has Xi'an Bright Laser TechnologiesLtd Performed Recently?

There hasn't been much to differentiate Xi'an Bright Laser TechnologiesLtd's and the industry's revenue growth lately. Perhaps the market is expecting future revenue performance to improve, justifying the currently elevated P/S. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

Want the full picture on analyst estimates for the company? Then our free report on Xi'an Bright Laser TechnologiesLtd will help you uncover what's on the horizon.

How Is Xi'an Bright Laser TechnologiesLtd's Revenue Growth Trending?

Xi'an Bright Laser TechnologiesLtd's P/S ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the industry.

Taking a look back first, we see that the company managed to grow revenues by a handy 7.3% last year. The latest three year period has also seen an excellent 136% overall rise in revenue, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing revenues over that time.

Looking ahead now, revenue is anticipated to climb by 69% during the coming year according to the four analysts following the company. That's shaping up to be materially higher than the 22% growth forecast for the broader industry.

With this in mind, it's not hard to understand why Xi'an Bright Laser TechnologiesLtd's P/S is high relative to its industry peers. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.

What Does Xi'an Bright Laser TechnologiesLtd's P/S Mean For Investors?

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 established that Xi'an Bright Laser TechnologiesLtd maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Machinery industry, as expected. Right now shareholders are comfortable with the P/S as they are quite confident future revenues aren't under threat. Unless the analysts have really missed the mark, these strong revenue forecasts should keep the share price buoyant.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Xi'an Bright Laser TechnologiesLtd that you need to be mindful of.

If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.

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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.