Revenues Tell The Story For Sivers Semiconductors AB (publ) (STO:SIVE) As Its Stock Soars 56%

Sivers Semiconductors AB (publ) (STO:SIVE) shareholders are no doubt pleased to see that the share price has bounced 56% in the last month, although it is still struggling to make up recently lost ground. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 46% in the last twelve months.

Following the firm bounce in price, given close to half the companies operating in Sweden's Semiconductor industry have price-to-sales ratios (or "P/S") below 2.6x, you may consider Sivers Semiconductors as a stock to potentially avoid with its 3.1x 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 as high as it is.

Check out our latest analysis for Sivers Semiconductors

What Does Sivers Semiconductors' Recent Performance Look Like?

With revenue growth that's inferior to most other companies of late, Sivers Semiconductors has been relatively sluggish. Perhaps the market is expecting future revenue performance to undergo a reversal of fortunes, which has elevated the P/S ratio. If not, then existing shareholders may be very nervous about the viability of the share price.

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

Is There Enough Revenue Growth Forecasted For Sivers Semiconductors?

In order to justify its P/S ratio, Sivers Semiconductors would need to produce impressive growth in excess of the industry.

Retrospectively, the last year delivered a decent 6.9% gain to the company's revenues. This was backed up an excellent period prior to see revenue up by 78% in total over the last three years. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 56% per year during the coming three years according to the only analyst following the company. That's shaping up to be materially higher than the 14% per annum growth forecast for the broader industry.

With this in mind, it's not hard to understand why Sivers Semiconductors' P/S is high relative to its industry peers. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.

The Bottom Line On Sivers Semiconductors' P/S

Sivers Semiconductors shares have taken a big step in a northerly direction, but its P/S is elevated as a result. 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.

Our look into Sivers Semiconductors shows that its P/S ratio remains high on the merit of its strong future revenues. At this stage investors feel the potential for a deterioration in revenues is quite remote, justifying the elevated P/S ratio. It's hard to see the share price falling strongly in the near future under these circumstances.

And what about other risks? Every company has them, and we've spotted 4 warning signs for Sivers Semiconductors (of which 3 can't be ignored!) you should know about.

If you're unsure about the strength of Sivers Semiconductors' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.