The E.W. Scripps Company's (NASDAQ:SSP) Shares Leap 55% Yet They're Still Not Telling The Full Story

Those holding The E.W. Scripps Company (NASDAQ:SSP) shares would be relieved that the share price has rebounded 55% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 46% over that time.

Although its price has surged higher, E.W. Scripps may still be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.1x, since almost half of all companies in the Media industry in the United States have P/S ratios greater than 0.9x and even P/S higher than 4x are not unusual. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.

View our latest analysis for E.W. Scripps

How Has E.W. Scripps Performed Recently?

While the industry has experienced revenue growth lately, E.W. Scripps' revenue has gone into reverse gear, which is not great. The P/S ratio is probably low because investors think this poor revenue performance isn't going to get any better. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.

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

Is There Any Revenue Growth Forecasted For E.W. Scripps?

E.W. Scripps' P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the industry.

Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 3.6%. Regardless, revenue has managed to lift by a handy 5.8% in aggregate from three years ago, thanks to the earlier period of growth. So we can start by confirming that the company has generally done a good job of growing revenue over that time, even though it had some hiccups along the way.

Shifting to the future, estimates from the five analysts covering the company suggest revenue should grow by 4.7% each year over the next three years. That's shaping up to be similar to the 5.2% per annum growth forecast for the broader industry.

With this in consideration, we find it intriguing that E.W. Scripps' P/S is lagging behind its industry peers. It may be that most investors are not convinced the company can achieve future growth expectations.

The Bottom Line On E.W. Scripps' P/S

E.W. Scripps' stock price has surged recently, but its but its P/S still remains modest. We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.

It looks to us like the P/S figures for E.W. Scripps remain low despite growth that is expected to be in line with other companies in the industry. The low P/S could be an indication that the revenue growth estimates are being questioned by the market. At least the risk of a price drop looks to be subdued, but investors seem to think future revenue could see some volatility.

Having said that, be aware E.W. Scripps is showing 1 warning sign in our investment analysis, you should know about.

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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