Further Upside For Albaad Massuot Yitzhak Ltd (TLV:ALBA) Shares Could Introduce Price Risks After 26% Bounce

Albaad Massuot Yitzhak Ltd (TLV:ALBA) 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 95%.

Although its price has surged higher, it would still be understandable if you think Albaad Massuot Yitzhak is a stock with good investment prospects with a price-to-sales ratios (or "P/S") of 0.2x, considering almost half the companies in Israel's Household Products industry have P/S ratios above 1.3x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

View our latest analysis for Albaad Massuot Yitzhak

How Albaad Massuot Yitzhak Has Been Performing

Revenue has risen at a steady rate over the last year for Albaad Massuot Yitzhak, which is generally not a bad outcome. Perhaps the market believes the recent revenue performance might fall short of industry figures in the near future, leading to a reduced P/S. If that doesn't eventuate, then existing shareholders may have reason to be optimistic about the future direction of the share price.

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

How Is Albaad Massuot Yitzhak's Revenue Growth Trending?

In order to justify its P/S ratio, Albaad Massuot Yitzhak would need to produce sluggish growth that's trailing the industry.

Taking a look back first, we see that the company managed to grow revenues by a handy 4.2% last year. The latest three year period has also seen a 21% 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.

Weighing that recent medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 7.7% shows it's about the same on an annualised basis.

In light of this, it's peculiar that Albaad Massuot Yitzhak's P/S sits below the majority of other companies. Apparently some shareholders are more bearish than recent times would indicate and have been accepting lower selling prices.

The Final Word

Albaad Massuot Yitzhak's stock price has surged recently, but its but its P/S still remains modest. 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 examination of Albaad Massuot Yitzhak revealed its three-year revenue trends looking similar to current industry expectations hasn't given the P/S the boost we expected, given that it's lower than the wider industry P/S, There could be some unobserved threats to revenue preventing the P/S ratio from matching the company's performance. medium-term

We don't want to rain on the parade too much, but we did also find 1 warning sign for Albaad Massuot Yitzhak that you need to be mindful of.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).

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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.