Potential Upside For ES Energy Save Holding AB (publ) (STO:ESGR B) Not Without Risk

There wouldn't be many who think ES Energy Save Holding AB (publ)'s (STO:ESGR B) price-to-sales (or "P/S") ratio of 0.5x is worth a mention when the median P/S for the Household Products industry in Sweden is very similar. 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.

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View our latest analysis for ES Energy Save Holding

How ES Energy Save Holding Has Been Performing

ES Energy Save Holding certainly has been doing a good job lately as its revenue growth has been positive while most other companies have been seeing their revenue go backwards. One possibility is that the P/S ratio is moderate because investors think the company's revenue will be less resilient moving forward. 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 not quite in favour.

Keen to find out how analysts think ES Energy Save Holding's future stacks up against the industry? In that case, our free report is a great place to start.

Is There Some Revenue Growth Forecasted For ES Energy Save Holding?

The only time you'd be comfortable seeing a P/S like ES Energy Save Holding's is when the company's growth is tracking the industry closely.

If we review the last year of revenue growth, the company posted a terrific increase of 96%. The latest three year period has also seen an excellent 180% overall rise in revenue, aided by its short-term performance. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Turning to the outlook, the next year should generate growth of 33% as estimated by the one analyst watching the company. With the industry only predicted to deliver 0.2%, the company is positioned for a stronger revenue result.

In light of this, it's curious that ES Energy Save Holding's P/S sits in line with the majority of other companies. It may be that most investors aren't convinced the company can achieve future growth expectations.

The Bottom Line On ES Energy Save Holding's P/S

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.

Despite enticing revenue growth figures that outpace the industry, ES Energy Save Holding's P/S isn't quite what we'd expect. When we see a strong revenue outlook, with growth outpacing the industry, we can only assume potential uncertainty around these figures are what might be placing slight 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.

You always need to take note of risks, for example - ES Energy Save Holding has 2 warning signs we think you should be aware of.

If these risks are making you reconsider your opinion on ES Energy Save Holding, 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.