Market Cool On Groupe OKwind Société anonyme's (EPA:ALOKW) Revenues Pushing Shares 27% Lower

To the annoyance of some shareholders, Groupe OKwind Société anonyme (EPA:ALOKW) shares are down a considerable 27% in the last month, which continues a horrid run for the company. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 92% loss during that time.

Following the heavy fall in price, Groupe OKwind Société anonyme's price-to-sales (or "P/S") ratio of 0.2x might make it look like a buy right now compared to the Electrical industry in France, where around half of the companies have P/S ratios above 0.7x and even P/S above 3x are quite common. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

Our free stock report includes 2 warning signs investors should be aware of before investing in Groupe OKwind Société anonyme. Read for free now.

Check out our latest analysis for Groupe OKwind Société anonyme

What Does Groupe OKwind Société anonyme's P/S Mean For Shareholders?

Groupe OKwind Société anonyme hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. Perhaps the P/S remains low as investors think the prospects of strong revenue growth aren't on the horizon. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Groupe OKwind Société anonyme.

Is There Any Revenue Growth Forecasted For Groupe OKwind Société anonyme?

In order to justify its P/S ratio, Groupe OKwind Société anonyme would need to produce sluggish growth that's trailing the industry.

Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 29%. However, a few very strong years before that means that it was still able to grow revenue by an impressive 125% in total over the last three years. Although it's been a bumpy ride, it's still fair to say the revenue growth recently has been more than adequate for the company.

Looking ahead now, revenue is anticipated to climb by 11% per annum during the coming three years according to the dual analysts following the company. With the industry only predicted to deliver 6.5% per year, the company is positioned for a stronger revenue result.

With this in consideration, we find it intriguing that Groupe OKwind Société anonyme's P/S sits behind most of its industry peers. It looks like most investors are not convinced at all that the company can achieve future growth expectations.

What Does Groupe OKwind Société anonyme's P/S Mean For Investors?

Groupe OKwind Société anonyme's recently weak share price has pulled its P/S back below other Electrical companies. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Groupe OKwind Société anonyme's analyst forecasts revealed that its superior revenue outlook isn't contributing to its P/S anywhere near as much as we would have predicted. There could be some major risk factors that are placing downward pressure on the P/S ratio. At least price risks look to be very low, but investors seem to think future revenues could see a lot of volatility.

Having said that, be aware Groupe OKwind Société anonyme is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant.

Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.

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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.