Some T-Robotics.Co.,Ltd. (KOSDAQ:117730) Shareholders Look For Exit As Shares Take 29% Pounding

Unfortunately for some shareholders, the T-Robotics.Co.,Ltd. (KOSDAQ:117730) share price has dived 29% in the last thirty days, prolonging recent pain. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 45% share price drop.

In spite of the heavy fall in price, you could still be forgiven for thinking T-Robotics.Co.Ltd is a stock not worth researching with a price-to-sales ratios (or "P/S") of 2.7x, considering almost half the companies in Korea's Machinery industry have P/S ratios below 1x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/S.

Check out our latest analysis for T-Robotics.Co.Ltd

What Does T-Robotics.Co.Ltd's Recent Performance Look Like?

With revenue growth that's exceedingly strong of late, T-Robotics.Co.Ltd has been doing very well. The P/S ratio is probably high because investors think this strong revenue growth will be enough to outperform the broader industry in the near future. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

Want the full picture on earnings, revenue and cash flow for the company? Then our free report on T-Robotics.Co.Ltd will help you shine a light on its historical performance.

Is There Enough Revenue Growth Forecasted For T-Robotics.Co.Ltd?

T-Robotics.Co.Ltd's P/S ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the industry.

If we review the last year of revenue growth, the company posted a terrific increase of 64%. The latest three year period has also seen a 12% overall rise in revenue, aided extensively by its short-term performance. Accordingly, shareholders would have probably been satisfied with the medium-term rates of revenue growth.

This is in contrast to the rest of the industry, which is expected to grow by 32% over the next year, materially higher than the company's recent medium-term annualised growth rates.

With this in mind, we find it worrying that T-Robotics.Co.Ltd's P/S exceeds that of its industry peers. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with recent growth rates.

What Does T-Robotics.Co.Ltd's P/S Mean For Investors?

There's still some elevation in T-Robotics.Co.Ltd's P/S, even if the same can't be said for its share price recently. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

The fact that T-Robotics.Co.Ltd currently trades on a higher P/S relative to the industry is an oddity, since its recent three-year growth is lower than the wider industry forecast. Right now we aren't comfortable with the high P/S as this revenue performance isn't likely to support such positive sentiment for long. Unless the recent medium-term conditions improve markedly, it's very challenging to accept these the share price as being reasonable.

There are also other vital risk factors to consider and we've discovered 3 warning signs for T-Robotics.Co.Ltd (2 are concerning!) that you should be aware of before investing here.

If these risks are making you reconsider your opinion on T-Robotics.Co.Ltd, 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.

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