Sentiment Still Eluding Mobile Telecommunications Company Saudi Arabia (TADAWUL:7030)

When close to half the companies operating in the Wireless Telecom industry in Saudi Arabia have price-to-sales ratios (or "P/S") above 1.5x, you may consider Mobile Telecommunications Company Saudi Arabia (TADAWUL:7030) as an attractive investment with its 1x 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.

See our latest analysis for Mobile Telecommunications Company Saudi Arabia

How Has Mobile Telecommunications Company Saudi Arabia Performed Recently?

With revenue growth that's superior to most other companies of late, Mobile Telecommunications Company Saudi Arabia has been doing relatively well. Perhaps the market is expecting future revenue performance to dive, which has kept the P/S suppressed. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

Want the full picture on analyst estimates for the company? Then our free report on Mobile Telecommunications Company Saudi Arabia will help you uncover what's on the horizon.

How Is Mobile Telecommunications Company Saudi Arabia's Revenue Growth Trending?

In order to justify its P/S ratio, Mobile Telecommunications Company Saudi Arabia would need to produce sluggish growth that's trailing the industry.

If we review the last year of revenue growth, the company posted a worthy increase of 7.3%. Revenue has also lifted 28% 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.

Turning to the outlook, the next three years should generate growth of 4.8% each year as estimated by the eight analysts watching the company. That's shaping up to be similar to the 6.3% per year growth forecast for the broader industry.

With this in consideration, we find it intriguing that Mobile Telecommunications Company Saudi Arabia's P/S is lagging behind its industry peers. It may be that most investors are not convinced the company can achieve future growth expectations.

What Does Mobile Telecommunications Company Saudi Arabia's P/S Mean For Investors?

Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

It looks to us like the P/S figures for Mobile Telecommunications Company Saudi Arabia remain low despite growth that is expected to be in line with other companies in the industry. When we see middle-of-the-road revenue growth like this, we assume it must be the potential risks that are what is placing pressure on the P/S ratio. However, if you agree with the analysts' forecasts, you may be able to pick up the stock at an attractive price.

There are also other vital risk factors to consider and we've discovered 3 warning signs for Mobile Telecommunications Company Saudi Arabia (1 is significant!) that you should be aware of before investing here.

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.

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