Market Participants Recognise Smartsens Technology (Shanghai) Co., Ltd.'s (SHSE:688213) Revenues Pushing Shares 27% Higher

Despite an already strong run, Smartsens Technology (Shanghai) Co., Ltd. (SHSE:688213) shares have been powering on, with a gain of 27% in the last thirty days. Looking back a bit further, it's encouraging to see the stock is up 34% in the last year.

In spite of the firm bounce in price, there still wouldn't be many who think Smartsens Technology (Shanghai)'s price-to-sales (or "P/S") ratio of 5.6x is worth a mention when the median P/S in China's Semiconductor industry is similar at about 6.9x. 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.

View our latest analysis for Smartsens Technology (Shanghai)

How Has Smartsens Technology (Shanghai) Performed Recently?

Smartsens Technology (Shanghai) certainly has been doing a good job lately as it's been growing revenue more than most other companies. One possibility is that the P/S ratio is moderate because investors think this strong revenue performance might be about to tail off. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Smartsens Technology (Shanghai).

Is There Some Revenue Growth Forecasted For Smartsens Technology (Shanghai)?

Smartsens Technology (Shanghai)'s P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.

Retrospectively, the last year delivered an exceptional 103% gain to the company's top line. Pleasingly, revenue has also lifted 97% in aggregate from three years ago, thanks to the last 12 months of growth. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Turning to the outlook, the next year should generate growth of 38% as estimated by the three analysts watching the company. With the industry predicted to deliver 41% growth , the company is positioned for a comparable revenue result.

With this information, we can see why Smartsens Technology (Shanghai) is trading at a fairly similar P/S to the industry. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

The Bottom Line On Smartsens Technology (Shanghai)'s P/S

Its shares have lifted substantially and now Smartsens Technology (Shanghai)'s P/S is back within range of the industry median. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

We've seen that Smartsens Technology (Shanghai) 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.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Smartsens Technology (Shanghai) (2 are potentially serious!) 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.