A Piece Of The Puzzle Missing From TeleChoice International Limited's (SGX:T41) 85% Share Price Climb

TeleChoice International Limited (SGX:T41) shares have continued their recent momentum with a 85% gain in the last month alone. The last month tops off a massive increase of 148% in the last year.

Even after such a large jump in price, you could still be forgiven for feeling indifferent about TeleChoice International's P/S ratio of 0.2x, since the median price-to-sales (or "P/S") ratio for the Electronic industry in Singapore is also close to 0.4x. 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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Check out our latest analysis for TeleChoice International

How Has TeleChoice International Performed Recently?

With revenue growth that's exceedingly strong of late, TeleChoice International has been doing very well. It might be that many expect the strong revenue performance to wane, which has kept the share price, and thus the P/S ratio, from rising. Those who are bullish on TeleChoice International will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.

Want the full picture on earnings, revenue and cash flow for the company? Then our free report on TeleChoice International will help you shine a light on its historical performance.

Is There Some Revenue Growth Forecasted For TeleChoice International?

The only time you'd be comfortable seeing a P/S like TeleChoice International'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 60%. Pleasingly, revenue has also lifted 96% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the revenue growth recently has been superb for the company.

This is in contrast to the rest of the industry, which is expected to grow by 20% over the next year, materially lower than the company's recent medium-term annualised growth rates.

In light of this, it's curious that TeleChoice International's P/S sits in line with the majority of other companies. It may be that most investors are not convinced the company can maintain its recent growth rates.

The Final Word

TeleChoice International appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in the industry 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.

We didn't quite envision TeleChoice International's P/S sitting in line with the wider industry, considering the revenue growth over the last three-year is higher than the current industry outlook. There could be some unobserved threats to revenue preventing the P/S ratio from matching this positive performance. While recent revenue trends over the past medium-term suggest that the risk of a price decline is low, investors appear to see the likelihood of revenue fluctuations in the future.

Don't forget that there may be other risks. For instance, we've identified 4 warning signs for TeleChoice International (3 are a bit concerning) you should be aware of.

If you're unsure about the strength of TeleChoice International's 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.