After Leaping 27% Akritas S.A. (ATH:AKRIT) Shares Are Not Flying Under The Radar

Explore Akritas's Fair Values from the Community and select yours

The Akritas S.A. (ATH:AKRIT) share price has done very well over the last month, posting an excellent gain of 27%. The last 30 days bring the annual gain to a very sharp 43%.

Even after such a large jump in price, it's still not a stretch to say that Akritas' price-to-sales (or "P/S") ratio of 0.4x right now seems quite "middle-of-the-road" compared to the Forestry industry in Greece, where the median P/S ratio is around 0.7x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

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Check out our latest analysis for Akritas

What Does Akritas' P/S Mean For Shareholders?

For instance, Akritas' receding revenue in recent times would have to be some food for thought. Perhaps investors believe the recent revenue performance is enough to keep in line with the industry, which is keeping the P/S from dropping off. If you like the company, you'd at least be hoping this is the case so that you could potentially pick up some stock while it's not quite in favour.

Although there are no analyst estimates available for Akritas, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

Is There Some Revenue Growth Forecasted For Akritas?

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

Retrospectively, the last year delivered a frustrating 5.6% decrease to the company's top line. At least revenue has managed not to go completely backwards from three years ago in aggregate, thanks to the earlier period of growth. 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 3.0% 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 Akritas' P/S sits in line with the majority of other companies. It seems most investors are expecting to see average growth rates continue into the future and are only willing to pay a moderate amount for the stock.

The Bottom Line On Akritas' P/S

Its shares have lifted substantially and now Akritas' P/S is back within range of the industry median. 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.

As we've seen, Akritas' three-year revenue trends seem to be contributing to its P/S, given they look similar to current industry expectations. Currently, with a past revenue trend that aligns closely wit the industry outlook, shareholders are confident the company's future revenue outlook won't contain any major surprises. Unless the recent medium-term conditions change, they will continue to support the share price at these levels.

Plus, you should also learn about these 4 warning signs we've spotted with Akritas (including 1 which is significant).

If you're unsure about the strength of Akritas' 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.