Fewer Investors Than Expected Jumping On DocGo Inc. (NASDAQ:DCGO)

There wouldn't be many who think DocGo Inc.'s (NASDAQ:DCGO) price-to-sales (or "P/S") ratio of 1x is worth a mention when the median P/S for the Healthcare industry in the United States is similar at about 1.2x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

View our latest analysis for DocGo

What Does DocGo's P/S Mean For Shareholders?

With revenue growth that's superior to most other companies of late, DocGo has been doing relatively well. One possibility is that the P/S ratio is moderate because investors think this strong revenue performance might be about to tail off. 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 DocGo will help you uncover what's on the horizon.

Is There Some Revenue Growth Forecasted For DocGo?

The only time you'd be comfortable seeing a P/S like DocGo's is when the company's growth is tracking the industry closely.

Taking a look back first, we see that the company grew revenue by an impressive 18% last year. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Looking ahead now, revenue is anticipated to climb by 36% during the coming year according to the seven analysts following the company. With the industry only predicted to deliver 7.6%, the company is positioned for a stronger revenue result.

With this in consideration, we find it intriguing that DocGo's P/S is closely matching its industry peers. It may be that most investors aren't convinced the company can achieve future growth expectations.

The Bottom Line On DocGo's P/S

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.

We've established that DocGo currently trades on a lower than expected P/S since its forecasted revenue growth is higher than the wider industry. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. It appears some are indeed anticipating revenue instability, because these conditions should normally provide a boost to the share price.

Plus, you should also learn about these 2 warning signs we've spotted with DocGo (including 1 which shouldn't be ignored).

If these risks are making you reconsider your opinion on DocGo, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.