DAEYANG ELECTRIC.Co.,Ltd.'s (KOSDAQ:108380) 26% Jump Shows Its Popularity With Investors

DAEYANG ELECTRIC.Co.,Ltd. (KOSDAQ:108380) shares have had a really impressive month, gaining 26% after a shaky period beforehand. Looking further back, the 23% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.

In spite of the firm bounce in price, you could still be forgiven for feeling indifferent about DAEYANG ELECTRIC.Co.Ltd's P/S ratio of 0.7x, since the median price-to-sales (or "P/S") ratio for the Electrical industry in Korea is also close to 0.9x. 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.

See our latest analysis for DAEYANG ELECTRIC.Co.Ltd

How DAEYANG ELECTRIC.Co.Ltd Has Been Performing

With its revenue growth in positive territory compared to the declining revenue of most other companies, DAEYANG ELECTRIC.Co.Ltd has been doing quite well of late. One possibility is that the P/S ratio is moderate because investors think the company's revenue will be less resilient moving forward. Those who are bullish on DAEYANG ELECTRIC.Co.Ltd will be hoping that this isn't the case, so that they can pick up the stock at a slightly lower valuation.

Want the full picture on analyst estimates for the company? Then our free report on DAEYANG ELECTRIC.Co.Ltd will help you uncover what's on the horizon.

What Are Revenue Growth Metrics Telling Us About The P/S?

In order to justify its P/S ratio, DAEYANG ELECTRIC.Co.Ltd would need to produce growth that's similar to the industry.

Taking a look back first, we see that the company grew revenue by an impressive 35% last year. As a result, it also grew revenue by 21% in total over the last three years. So we can start by confirming that the company has actually done a good job of growing revenue over that time.

Looking ahead now, revenue is anticipated to climb by 11% during the coming year according to the one analyst following the company. Meanwhile, the rest of the industry is forecast to expand by 12%, which is not materially different.

In light of this, it's understandable that DAEYANG ELECTRIC.Co.Ltd's P/S sits in line with the majority of other companies. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

The Bottom Line On DAEYANG ELECTRIC.Co.Ltd's P/S

Its shares have lifted substantially and now DAEYANG ELECTRIC.Co.Ltd's P/S is back within range of the industry median. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We've seen that DAEYANG ELECTRIC.Co.Ltd maintains an adequate P/S seeing as its revenue growth figures match the rest of the industry. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. If all things remain constant, the possibility of a drastic share price movement remains fairly remote.

It is also worth noting that we have found 2 warning signs for DAEYANG ELECTRIC.Co.Ltd that you need to take into consideration.

If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).

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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.