Market Participants Recognise Coca-Cola Bottlers Japan Holdings Inc.'s (TSE:2579) Revenues

With a median price-to-sales (or "P/S") ratio of close to 0.8x in the Beverage industry in Japan, you could be forgiven for feeling indifferent about Coca-Cola Bottlers Japan Holdings Inc.'s (TSE:2579) P/S ratio of 0.4x. 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.

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See our latest analysis for Coca-Cola Bottlers Japan Holdings

What Does Coca-Cola Bottlers Japan Holdings' Recent Performance Look Like?

Coca-Cola Bottlers Japan Holdings could be doing better as it's been growing revenue less than most other companies lately. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. You'd really hope so, otherwise you're paying a relatively elevated price for a company with this sort of growth profile.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Coca-Cola Bottlers Japan Holdings.

Is There Some Revenue Growth Forecasted For Coca-Cola Bottlers Japan Holdings?

Coca-Cola Bottlers Japan Holdings' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.

Taking a look back first, we see that the company managed to grow revenues by a handy 2.6% last year. Revenue has also lifted 14% in aggregate from three years ago, partly thanks to the last 12 months of growth. Therefore, it's fair to say the revenue growth recently has been respectable for the company.

Shifting to the future, estimates from the seven analysts covering the company suggest revenue should grow by 0.9% per annum over the next three years. With the industry predicted to deliver 2.3% growth per annum, the company is positioned for a comparable revenue result.

With this information, we can see why Coca-Cola Bottlers Japan Holdings is trading at a fairly similar P/S to the industry. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

What Does Coca-Cola Bottlers Japan Holdings' P/S Mean For Investors?

We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.

A Coca-Cola Bottlers Japan Holdings' P/S seems about right to us given the knowledge that analysts are forecasting a revenue outlook that is similar to the Beverage industry. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. Unless these conditions change, they will continue to support the share price at these levels.

You should always think about risks. Case in point, we've spotted 3 warning signs for Coca-Cola Bottlers Japan Holdings you should be aware of.

If these risks are making you reconsider your opinion on Coca-Cola Bottlers Japan Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.