Amprius Technologies, Inc.'s (NYSE:AMPX) Share Price Is Still Matching Investor Opinion Despite 30% Slump

Amprius Technologies, Inc. (NYSE:AMPX) shareholders won't be pleased to see that the share price has had a very rough month, dropping 30% and undoing the prior period's positive performance. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 20% in that time.

In spite of the heavy fall in price, given around half the companies in the United States' Electrical industry have price-to-sales ratios (or "P/S") below 1.6x, you may still consider Amprius Technologies as a stock to avoid entirely with its 14.8x P/S ratio. 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.

Check out our latest analysis for Amprius Technologies

What Does Amprius Technologies' Recent Performance Look Like?

With revenue growth that's superior to most other companies of late, Amprius Technologies has been doing relatively well. The P/S is probably high because investors think this strong revenue performance will continue. However, if this isn't the case, investors might get caught out paying too much for the stock.

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

How Is Amprius Technologies' Revenue Growth Trending?

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 grew revenue by an impressive 196% last year. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. 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 three years should generate growth of 132% each year as estimated by the seven analysts watching the company. Meanwhile, the rest of the industry is forecast to only expand by 21% each year, which is noticeably less attractive.

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.

The Bottom Line On Amprius Technologies' P/S

Amprius Technologies' shares may have suffered, but its P/S remains high. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

We've established that Amprius Technologies maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Electrical industry, as expected. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. Unless the analysts have really missed the mark, these strong revenue forecasts should keep the share price buoyant.

Plus, you should also learn about these 5 warning signs we've spotted with Amprius Technologies (including 2 which are a bit concerning).

If you're unsure about the strength of Amprius Technologies' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.