Cosmax Nbt, Inc. (KOSDAQ:222040) Looks Inexpensive But Perhaps Not Attractive Enough

When you see that almost half of the companies in the Personal Products industry in Korea have price-to-sales ratios (or "P/S") above 1.4x, Cosmax Nbt, Inc. (KOSDAQ:222040) looks to be giving off some buy signals with its 0.3x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.

Check out our latest analysis for Cosmax Nbt

How Cosmax Nbt Has Been Performing

Cosmax Nbt could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. Perhaps the P/S remains low as investors think the prospects of strong revenue growth aren't on the horizon. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value.

Want the full picture on analyst estimates for the company? Then our free report on Cosmax Nbt will help you uncover what's on the horizon.

Is There Any Revenue Growth Forecasted For Cosmax Nbt?

There's an inherent assumption that a company should underperform the industry for P/S ratios like Cosmax Nbt's to be considered reasonable.

Retrospectively, the last year delivered a frustrating 1.7% decrease to the company's top line. Regardless, revenue has managed to lift by a handy 18% in aggregate from three years ago, thanks to the earlier period of growth. Accordingly, while they would have preferred to keep the run going, shareholders would be roughly satisfied with the medium-term rates of revenue growth.

Shifting to the future, estimates from the one analyst covering the company suggest revenue should grow by 17% over the next year. With the industry predicted to deliver 20% growth, the company is positioned for a weaker revenue result.

In light of this, it's understandable that Cosmax Nbt's P/S sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.

What Does Cosmax Nbt's 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.

As we suspected, our examination of Cosmax Nbt's analyst forecasts revealed that its inferior revenue outlook is contributing to its low P/S. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. It's hard to see the share price rising strongly in the near future under these circumstances.

Having said that, be aware Cosmax Nbt is showing 1 warning sign in our investment analysis, you should know about.

If these risks are making you reconsider your opinion on Cosmax Nbt, 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.

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