SKYX Platforms Corp. (NASDAQ:SKYX) Might Not Be As Mispriced As It Looks After Plunging 39%

SKYX Platforms Corp. (NASDAQ:SKYX) shares have retraced a considerable 39% in the last month, reversing a fair amount of their solid recent performance. The recent drop has obliterated the annual return, with the share price now down 4.0% over that longer period.

In spite of the heavy fall in price, you could still be forgiven for feeling indifferent about SKYX Platforms' P/S ratio of 1.5x, since the median price-to-sales (or "P/S") ratio for the Electrical industry in the United States is about the same. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

See our latest analysis for SKYX Platforms

How Has SKYX Platforms Performed Recently?

Recent times have been advantageous for SKYX Platforms as its revenues have been rising faster than most other companies. It might be that many expect the strong revenue performance to wane, which has kept the P/S ratio from rising. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

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?

There's an inherent assumption that a company should be matching the industry for P/S ratios like SKYX Platforms' to be considered reasonable.

If we review the last year of revenue growth, the company posted a terrific increase of 131%. This great performance means it was also able to deliver immense revenue growth over the last three years. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.

Looking ahead now, revenue is anticipated to climb by 24% during the coming year according to the four analysts following the company. That's shaping up to be materially higher than the 7.7% 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. It may be that most investors aren't convinced the company can achieve future growth expectations.

What Does SKYX Platforms' P/S Mean For Investors?

Following SKYX Platforms' share price tumble, its P/S is just clinging on to the industry median P/S. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

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. 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 - SKYX Platforms has 2 warning signs we think you should be aware of.

If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).

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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.