Improved Revenues Required Before Anora Group Oyj (HEL:ANORA) Stock's 26% Jump Looks Justified

The Anora Group Oyj (HEL:ANORA) share price has done very well over the last month, posting an excellent gain of 26%. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 28% over that time.

In spite of the firm bounce in price, when close to half the companies operating in Finland's Beverage industry have price-to-sales ratios (or "P/S") above 1.2x, you may still consider Anora Group Oyj as an enticing stock to check out with its 0.3x P/S ratio. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

Check out our latest analysis for Anora Group Oyj

How Has Anora Group Oyj Performed Recently?

Anora Group Oyj could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. The P/S ratio is probably low because investors think this poor revenue performance isn't going to get any better. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.

Want the full picture on analyst estimates for the company? Then our free report on Anora Group Oyj will help you uncover what's on the horizon.

Is There Any Revenue Growth Forecasted For Anora Group Oyj?

The only time you'd be truly comfortable seeing a P/S as low as Anora Group Oyj's is when the company's growth is on track to lag the industry.

Retrospectively, the last year delivered a frustrating 4.7% decrease to the company's top line. Still, the latest three year period has seen an excellent 45% overall rise in revenue, in spite of its unsatisfying short-term performance. So we can start by confirming that the company has generally done a very good job of growing revenue over that time, even though it had some hiccups along the way.

Shifting to the future, estimates from the three analysts covering the company suggest revenue should grow by 1.1% per annum over the next three years. That's shaping up to be materially lower than the 4.1% per annum growth forecast for the broader industry.

In light of this, it's understandable that Anora Group Oyj's P/S sits below the majority of other companies. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.

What Does Anora Group Oyj's P/S Mean For Investors?

Anora Group Oyj's stock price has surged recently, but its but its P/S still remains modest. 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.

We've established that Anora Group Oyj maintains its low P/S on the weakness of its forecast growth being lower than the wider industry, as expected. Shareholders' pessimism on the revenue prospects for the company seems to be the main contributor to the depressed P/S. It's hard to see the share price rising strongly in the near future under these circumstances.

You always need to take note of risks, for example - Anora Group Oyj has 1 warning sign we think you should be aware of.

If these risks are making you reconsider your opinion on Anora Group Oyj, 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.