Amprius Technologies, Inc. (NYSE:AMPX) Looks Just Right With A 27% Price Jump

Those holding Amprius Technologies, Inc. (NYSE:AMPX) shares would be relieved that the share price has rebounded 27% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. The last 30 days bring the annual gain to a very sharp 99%.

After such a large jump in price, when almost half of the companies in the United States' Electrical industry have price-to-sales ratios (or "P/S") below 2x, you may consider Amprius Technologies as a stock not worth researching with its 9.9x P/S ratio. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.

Our free stock report includes 4 warning signs investors should be aware of before investing in Amprius Technologies. Read for free now.

Check out our latest analysis for Amprius Technologies

How Has Amprius Technologies Performed Recently?

Recent times have been advantageous for Amprius Technologies as its revenues have been rising faster than most other companies. It seems that many are expecting the strong revenue performance to persist, which has raised the P/S. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

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

How Is Amprius Technologies' Revenue Growth Trending?

There's an inherent assumption that a company should far outperform the industry for P/S ratios like Amprius Technologies' to be considered reasonable.

If we review the last year of revenue growth, the company posted a terrific increase of 209%. 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.

Shifting to the future, estimates from the seven analysts covering the company suggest revenue should grow by 100% per year over the next three years. That's shaping up to be materially higher than the 13% each year growth forecast for the broader industry.

In light of this, it's understandable that Amprius Technologies' P/S sits above the majority of other companies. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.

What We Can Learn From Amprius Technologies' P/S?

The strong share price surge has lead to Amprius Technologies' P/S soaring as well. 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.

Our look into Amprius Technologies 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. Unless these conditions change, they will continue to provide strong support to the share price.

You should always think about risks. Case in point, we've spotted 4 warning signs for Amprius Technologies you should be aware of, and 1 of them shouldn't be ignored.

If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.

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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.