Zaggle Prepaid Ocean Services Limited (NSE:ZAGGLE) Doing What It Can To Lift Shares

There wouldn't be many who think Zaggle Prepaid Ocean Services Limited's (NSE:ZAGGLE) price-to-sales (or "P/S") ratio of 5.2x is worth a mention when the median P/S for the Software industry in India is similar at about 5.4x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

See our latest analysis for Zaggle Prepaid Ocean Services

How Has Zaggle Prepaid Ocean Services Performed Recently?

Zaggle Prepaid Ocean Services certainly has been doing a good job lately as it's been growing revenue more than most other companies. One possibility is that the P/S ratio is moderate because investors think this strong revenue performance might be about to tail off. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.

Keen to find out how analysts think Zaggle Prepaid Ocean Services' future stacks up against the industry? In that case, our free report is a great place to start.

How Is Zaggle Prepaid Ocean Services' Revenue Growth Trending?

The only time you'd be comfortable seeing a P/S like Zaggle Prepaid Ocean Services' is when the company's growth is tracking the industry closely.

Taking a look back first, we see that the company grew revenue by an impressive 40% last year. The strong recent performance means it was also able to grow revenue by 223% in total over the last three years. So we can start by confirming that the company has done a great job of growing revenue over that time.

Turning to the outlook, the next three years should generate growth of 36% each year as estimated by the sole analyst watching the company. With the industry only predicted to deliver 18% per annum, the company is positioned for a stronger revenue result.

In light of this, it's curious that Zaggle Prepaid Ocean Services' P/S sits in line with the majority of other companies. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.

The Final Word

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.

Despite enticing revenue growth figures that outpace the industry, Zaggle Prepaid Ocean Services' P/S isn't quite what we'd expect. Perhaps uncertainty in the revenue forecasts are what's keeping the P/S ratio consistent with the rest of the industry. It appears some are indeed anticipating revenue instability, because these conditions should normally provide a boost to the share price.

Before you settle on your opinion, we've discovered 1 warning sign for Zaggle Prepaid Ocean Services that you should be aware of.

If you're unsure about the strength of Zaggle Prepaid Ocean Services' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com