A Piece Of The Puzzle Missing From MINT Société anonyme's (EPA:ALMIN) 26% Share Price Climb

MINT Société anonyme (EPA:ALMIN) shares have continued their recent momentum with a 26% gain in the last month alone. The last 30 days bring the annual gain to a very sharp 75%.

Although its price has surged higher, given about half the companies operating in France's Electric Utilities industry have price-to-sales ratios (or "P/S") above 1x, you may still consider MINT Société anonyme as an attractive investment with its 0.5x P/S ratio. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

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View our latest analysis for MINT Société anonyme

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

Recent times haven't been great for MINT Société anonyme as its revenue has been falling quicker than most other companies. The P/S ratio is probably low because investors think this poor revenue performance isn't going to improve at all. If you still like the company, you'd want its revenue trajectory to turn around before making any decisions. Or at the very least, you'd be hoping the revenue slide doesn't get any worse if your plan is to pick up some stock while it's out of favour.

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

How Is MINT Société anonyme's Revenue Growth Trending?

The only time you'd be truly comfortable seeing a P/S as low as MINT Société anonyme's is when the company's growth is on track to lag 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 15%. As a result, revenue from three years ago have also fallen 30% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 9.1% during the coming year according to the sole analyst following the company. With the industry only predicted to deliver 5.5%, the company is positioned for a stronger revenue result.

In light of this, it's peculiar that MINT Société anonyme's P/S sits below the majority of other companies. Apparently some shareholders are doubtful of the forecasts and have been accepting significantly lower selling prices.

What We Can Learn From MINT Société anonyme's P/S?

The latest share price surge wasn't enough to lift MINT Société anonyme's P/S close to 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.

To us, it seems MINT Société anonyme currently trades on a significantly depressed P/S given its forecasted revenue growth is higher than the rest of its industry. 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.

It is also worth noting that we have found 4 warning signs for MINT Société anonyme that you need to take into consideration.

If you're unsure about the strength of MINT Société anonyme's 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.