Guardian Pharmacy Services, Inc. (NYSE:GRDN) Stocks Shoot Up 27% But Its P/S Still Looks Reasonable

The Guardian Pharmacy Services, Inc. (NYSE:GRDN) share price has done very well over the last month, posting an excellent gain of 27%. The last 30 days bring the annual gain to a very sharp 34%.

Even after such a large jump in price, it's still not a stretch to say that Guardian Pharmacy Services' price-to-sales (or "P/S") ratio of 1.4x right now seems quite "middle-of-the-road" compared to the Healthcare industry in the United States, seeing as it matches the P/S ratio of the wider industry. 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.

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Check out our latest analysis for Guardian Pharmacy Services

What Does Guardian Pharmacy Services' Recent Performance Look Like?

With revenue growth that's superior to most other companies of late, Guardian Pharmacy Services 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 you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.

Want the full picture on analyst estimates for the company? Then our free report on Guardian Pharmacy Services will help you uncover what's on the horizon.

How Is Guardian Pharmacy Services' Revenue Growth Trending?

Guardian Pharmacy Services' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.

Retrospectively, the last year delivered an exceptional 19% gain to the company's top line. The strong recent performance means it was also able to grow revenue by 50% in total over the last three years. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Turning to the outlook, the next year should generate growth of 6.7% as estimated by the four analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 6.5%, which is not materially different.

With this information, we can see why Guardian Pharmacy Services is trading at a fairly similar P/S to the industry. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.

What Does Guardian Pharmacy Services' P/S Mean For Investors?

Guardian Pharmacy Services' stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

We've seen that Guardian Pharmacy Services maintains an adequate P/S seeing as its revenue growth figures match the rest of the industry. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. Unless these conditions change, they will continue to support the share price at these levels.

Many other vital risk factors can be found on the company's balance sheet. You can assess many of the main risks through our free balance sheet analysis for Guardian Pharmacy Services with six simple checks.

If these risks are making you reconsider your opinion on Guardian Pharmacy Services, 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.