Cautious Investors Not Rewarding SKYX Platforms Corp.'s (NASDAQ:SKYX) Performance Completely

Explore SKYX Platforms's Fair Values from the Community and select yours

With a price-to-sales (or "P/S") ratio of 1.4x SKYX Platforms Corp. (NASDAQ:SKYX) may be sending bullish signals at the moment, given that almost half of all the Electrical companies in the United States have P/S ratios greater than 2x and even P/S higher than 6x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

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Check out our latest analysis for SKYX Platforms

How SKYX Platforms Has Been Performing

SKYX Platforms' revenue growth of late has been pretty similar to most other companies. It might be that many expect the mediocre revenue performance to degrade, which has repressed the P/S ratio. Those who are bullish on SKYX Platforms will be hoping that this isn't the case.

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

Is There Any Revenue Growth Forecasted For SKYX Platforms?

The only time you'd be truly comfortable seeing a P/S as low as SKYX Platforms' is when the company's growth is on track to lag the industry.

Retrospectively, the last year delivered a decent 12% gain to the company's revenues. However, due to its less than impressive performance prior to this period, revenue growth is practically non-existent over the last three years overall. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.

Turning to the outlook, the next year should generate growth of 22% as estimated by the four analysts watching the company. With the industry only predicted to deliver 11%, the company is positioned for a stronger revenue result.

In light of this, it's peculiar that SKYX Platforms' P/S sits below the majority of other companies. Apparently some shareholders are doubtful of the forecasts and have been accepting significantly lower selling prices.

The Key Takeaway

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.

To us, it seems SKYX Platforms currently trades on a significantly depressed P/S given its forecasted revenue growth is higher than the rest of its industry. There could be some major risk factors that are placing downward pressure on the P/S ratio. It appears the market could be anticipating revenue instability, because these conditions should normally provide a boost to the share price.

You should always think about risks. Case in point, we've spotted 1 warning sign for SKYX Platforms you should be aware of.

If you're unsure about the strength of SKYX Platforms' 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.