ENENSYS Technologies SA's (EPA:ALNN6) P/S Is Still On The Mark Following 35% Share Price Bounce

Despite an already strong run, ENENSYS Technologies SA (EPA:ALNN6) shares have been powering on, with a gain of 35% in the last thirty days. The annual gain comes to 119% following the latest surge, making investors sit up and take notice.

In spite of the firm bounce in price, there still wouldn't be many who think ENENSYS Technologies' price-to-sales (or "P/S") ratio of 0.7x is worth a mention when it essentially matches the median P/S in France's Communications industry. 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.

See our latest analysis for ENENSYS Technologies

What Does ENENSYS Technologies' Recent Performance Look Like?

Recent times have been pleasing for ENENSYS Technologies as its revenue has risen in spite of the industry's average revenue going into reverse. It might be that many expect the strong revenue performance to deteriorate like the rest, which has kept the P/S ratio from rising. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

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

How Is ENENSYS Technologies' Revenue Growth Trending?

In order to justify its P/S ratio, ENENSYS Technologies would need to produce growth that's similar to the industry.

If we review the last year of revenue growth, the company posted a worthy increase of 12%. The latest three year period has also seen a 30% overall rise in revenue, aided somewhat by its short-term performance. Accordingly, shareholders would have probably been satisfied with the medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 7.5% during the coming year according to the one analyst following the company. Meanwhile, the rest of the industry is forecast to expand by 7.3%, which is not materially different.

In light of this, it's understandable that ENENSYS Technologies' P/S sits in line with the majority of other companies. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.

The Bottom Line On ENENSYS Technologies' P/S

ENENSYS Technologies appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in the industry 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.

Our look at ENENSYS Technologies' revenue growth estimates show that its P/S is about what we expect, as both metrics follow closely with the industry averages. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. All things considered, if the P/S and revenue estimates contain no major shocks, then it's hard to see the share price moving strongly in either direction in the near future.

Before you take the next step, you should know about the 4 warning signs for ENENSYS Technologies (2 are a bit concerning!) that we have uncovered.

If you're unsure about the strength of ENENSYS Technologies' 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.