A Piece Of The Puzzle Missing From SKYX Platforms Corp.'s (NASDAQ:SKYX) 31% Share Price Climb

SKYX Platforms Corp. (NASDAQ:SKYX) shares have had a really impressive month, gaining 31% after a shaky period beforehand. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 19% in the last twelve months.

Even after such a large jump in price, it's still not a stretch to say that SKYX Platforms' price-to-sales (or "P/S") ratio of 1.6x right now seems quite "middle-of-the-road" compared to the Electrical industry in the United States, where the median P/S ratio is around 2x. 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.

View our latest analysis for SKYX Platforms

How SKYX Platforms Has Been Performing

Recent times have been advantageous for SKYX Platforms as its revenues have been rising faster than most other companies. Perhaps the market is expecting this level of performance to taper off, keeping the P/S from soaring. 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 SKYX Platforms will help you uncover what's on the horizon.

Is There Some Revenue Growth Forecasted For SKYX Platforms?

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

Retrospectively, the last year delivered an exceptional 131% gain to the company's top line. Spectacularly, three year revenue growth has ballooned by several orders of magnitude, thanks in part to the last 12 months of revenue growth. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.

Turning to the outlook, the next year should generate growth of 37% as estimated by the five analysts watching the company. That's shaping up to be materially higher than the 19% growth forecast for the broader industry.

With this information, we find it interesting that SKYX Platforms is trading at a fairly similar P/S compared to the industry. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.

The Key Takeaway

SKYX Platforms 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.

Looking at SKYX Platforms' analyst forecasts revealed that its superior revenue outlook isn't giving the boost to its P/S that we would've expected. Perhaps uncertainty in the revenue forecasts are what's keeping the P/S ratio consistent with the rest of the industry. It appears some are indeed anticipating revenue instability, because these conditions should normally provide a boost to the share price.

Before you take the next step, you should know about the 2 warning signs for SKYX Platforms that we have uncovered.

Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.

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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.