Market Cool On KORU Medical Systems, Inc.'s (NASDAQ:KRMD) Revenues

There wouldn't be many who think KORU Medical Systems, Inc.'s (NASDAQ:KRMD) price-to-sales (or "P/S") ratio of 3.6x is worth a mention when the median P/S for the Medical Equipment industry in the United States is similar at about 3.4x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

See our latest analysis for KORU Medical Systems

What Does KORU Medical Systems' Recent Performance Look Like?

Recent times haven't been great for KORU Medical Systems as its revenue has been rising slower than most other companies. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.

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

Is There Some Revenue Growth Forecasted For KORU Medical Systems?

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

Taking a look back first, we see that the company managed to grow revenues by a handy 6.0% last year. The latest three year period has also seen a 8.9% overall rise in revenue, aided somewhat by its short-term performance. Therefore, it's fair to say the revenue growth recently has been respectable for the company.

Shifting to the future, estimates from the five analysts covering the company suggest revenue should grow by 20% per year over the next three years. With the industry only predicted to deliver 9.7% per annum, the company is positioned for a stronger revenue result.

With this in consideration, we find it intriguing that KORU Medical Systems' P/S is closely matching its industry peers. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.

The Bottom Line On KORU Medical Systems' P/S

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.

Despite enticing revenue growth figures that outpace the industry, KORU Medical Systems' P/S isn't quite what we'd expect. Perhaps uncertainty in the revenue forecasts are what's keeping the P/S ratio consistent with the rest of the industry. It appears some are indeed anticipating revenue instability, because these conditions should normally provide a boost to the share price.

You always need to take note of risks, for example - KORU Medical Systems has 2 warning signs we think you should be aware of.

If these risks are making you reconsider your opinion on KORU Medical Systems, 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.