Revenues Tell The Story For Kingstone Companies, Inc. (NASDAQ:KINS) As Its Stock Soars 31%

Despite an already strong run, Kingstone Companies, Inc. (NASDAQ:KINS) shares have been powering on, with a gain of 31% in the last thirty days. This latest share price bounce rounds out a remarkable 375% gain over the last twelve months.

Although its price has surged higher, it's still not a stretch to say that Kingstone Companies' price-to-sales (or "P/S") ratio of 0.9x right now seems quite "middle-of-the-road" compared to the Insurance industry in the United States, where the median P/S ratio is around 1.1x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

Check out our latest analysis for Kingstone Companies

What Does Kingstone Companies' P/S Mean For Shareholders?

While the industry has experienced revenue growth lately, Kingstone Companies' revenue has gone into reverse gear, which is not great. One possibility is that the P/S ratio is moderate because investors think this poor revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.

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

Is There Some Revenue Growth Forecasted For Kingstone Companies?

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

Retrospectively, the last year delivered a frustrating 2.0% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 4.3% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.

Looking ahead now, revenue is anticipated to climb by 4.2% during the coming year according to the one analyst following the company. With the industry predicted to deliver 4.3% growth , the company is positioned for a comparable revenue result.

With this information, we can see why Kingstone Companies is trading at a fairly similar P/S to the industry. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

The Bottom Line On Kingstone Companies' P/S

Kingstone Companies' 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.

A Kingstone Companies' P/S seems about right to us given the knowledge that analysts are forecasting a revenue outlook that is similar to the Insurance 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. If all things remain constant, the possibility of a drastic share price movement remains fairly remote.

Before you take the next step, you should know about the 2 warning signs for Kingstone Companies that we have uncovered.

If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).

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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.