A Piece Of The Puzzle Missing From Grupa Kapitalowa IMMOBILE S.A.'s (WSE:GKI) 28% Share Price Climb

Grupa Kapitalowa IMMOBILE S.A. (WSE:GKI) shareholders have had their patience rewarded with a 28% share price jump in the last month. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 12% in the last twelve months.

In spite of the firm bounce in price, given about half the companies operating in Poland's Industrials industry have price-to-sales ratios (or "P/S") above 1x, you may still consider Grupa Kapitalowa IMMOBILE as an attractive investment with its 0.2x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

View our latest analysis for Grupa Kapitalowa IMMOBILE

How Grupa Kapitalowa IMMOBILE Has Been Performing

Recent times have been advantageous for Grupa Kapitalowa IMMOBILE as its revenues have been rising faster than most other companies. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the share price, and thus the P/S ratio. If the company manages to stay the course, then investors should be rewarded with a share price that matches its revenue figures.

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

Is There Any Revenue Growth Forecasted For Grupa Kapitalowa IMMOBILE?

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

Retrospectively, the last year delivered a decent 14% gain to the company's revenues. The latest three year period has also seen an excellent 71% overall rise in revenue, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing revenues over that time.

Shifting to the future, estimates from the lone analyst covering the company suggest revenue should grow by 20% over the next year. That's shaping up to be materially higher than the 6.9% growth forecast for the broader industry.

With this in consideration, we find it intriguing that Grupa Kapitalowa IMMOBILE's P/S sits behind most of its industry peers. It looks like most investors are not convinced at all that the company can achieve future growth expectations.

The Final Word

Grupa Kapitalowa IMMOBILE's stock price has surged recently, but its but its P/S still remains modest. 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.

Grupa Kapitalowa IMMOBILE's analyst forecasts revealed that its superior revenue outlook isn't contributing to its P/S anywhere near as much as we would have predicted. When we see strong growth forecasts like this, we can only assume potential risks are what might be placing significant pressure on the P/S ratio. It appears the market could be anticipating revenue instability, because these conditions should normally provide a boost to the share price.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Grupa Kapitalowa IMMOBILE (2 are a bit unpleasant!) that you need to be mindful of.

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.