AS Latvijas Juras medicinas centrs (MUN:UOM) Looks Just Right With A 31% Price Jump

The AS Latvijas Juras medicinas centrs (MUN:UOM) share price has done very well over the last month, posting an excellent gain of 31%. The last 30 days bring the annual gain to a very sharp 25%.

In spite of the firm bounce in price, there still wouldn't be many who think AS Latvijas Juras medicinas centrs' price-to-sales (or "P/S") ratio of 0.6x is worth a mention when it essentially matches the median P/S in Germany's Healthcare industry. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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See our latest analysis for AS Latvijas Juras medicinas centrs

How Has AS Latvijas Juras medicinas centrs Performed Recently?

We'd have to say that with no tangible growth over the last year, AS Latvijas Juras medicinas centrs' revenue has been unimpressive. It might be that many expect the uninspiring revenue performance to only match most other companies at best over the coming period, which has kept the P/S from rising. Those who are bullish on AS Latvijas Juras medicinas centrs will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.

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 AS Latvijas Juras medicinas centrs' earnings, revenue and cash flow.

How Is AS Latvijas Juras medicinas centrs' Revenue Growth Trending?

There's an inherent assumption that a company should be matching the industry for P/S ratios like AS Latvijas Juras medicinas centrs' to be considered reasonable.

If we review the last year of revenue, the company posted a result that saw barely any deviation from a year ago. Fortunately, a few good years before that means that it was still able to grow revenue by 6.3% in total over the last three years. Therefore, it's fair to say that revenue growth has been inconsistent recently for the company.

It's interesting to note that the rest of the industry is similarly expected to grow by 3.3% over the next year, which is fairly even with the company's recent medium-term annualised growth rates.

In light of this, it's understandable that AS Latvijas Juras medicinas centrs' P/S sits in line with the majority of other companies. Apparently shareholders are comfortable to simply hold on assuming the company will continue keeping a low profile.

What Does AS Latvijas Juras medicinas centrs' P/S Mean For Investors?

Its shares have lifted substantially and now AS Latvijas Juras medicinas centrs' P/S is back within range of the industry median. We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.

As we've seen, AS Latvijas Juras medicinas centrs' three-year revenue trends seem to be contributing to its P/S, given they look similar to current industry expectations. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. If recent medium-term revenue trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.

You always need to take note of risks, for example - AS Latvijas Juras medicinas centrs has 2 warning signs we think you should be aware of.

If you're unsure about the strength of AS Latvijas Juras medicinas centrs' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.