Amprius Technologies, Inc.'s (NYSE:AMPX) 89% Jump Shows Its Popularity With Investors

Despite an already strong run, Amprius Technologies, Inc. (NYSE:AMPX) shares have been powering on, with a gain of 89% in the last thirty days. The last 30 days were the cherry on top of the stock's 911% gain in the last year, which is nothing short of spectacular.

Following the firm bounce in price, you could be forgiven for thinking Amprius Technologies is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 37.5x, considering almost half the companies in the United States' Electrical industry have P/S ratios below 2.3x. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.

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See our latest analysis for Amprius Technologies

What Does Amprius Technologies' P/S Mean For Shareholders?

Amprius Technologies certainly has been doing a good job lately as it's been growing revenue more than most other companies. It seems that many are expecting the strong revenue performance to persist, which has raised the P/S. If not, then existing shareholders might be a little nervous about the viability of the share price.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Amprius Technologies.

Is There Enough Revenue Growth Forecasted For Amprius Technologies?

In order to justify its P/S ratio, Amprius Technologies would need to produce outstanding growth that's well in excess of the industry.

Taking a look back first, we see that the company's revenues underwent some rampant growth over the last 12 months. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 90% each year during the coming three years according to the seven analysts following the company. That's shaping up to be materially higher than the 16% per annum growth forecast for the broader industry.

With this in mind, it's not hard to understand why Amprius Technologies' P/S is high relative to its industry peers. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

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

The strong share price surge has lead to Amprius Technologies' P/S soaring as well. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

As we suspected, our examination of Amprius Technologies' analyst forecasts revealed that its superior revenue outlook is contributing to its high P/S. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. It's hard to see the share price falling strongly in the near future under these circumstances.

And what about other risks? Every company has them, and we've spotted 2 warning signs for Amprius Technologies you should know about.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).

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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.