Cautious Investors Not Rewarding Clear Channel Outdoor Holdings, Inc.'s (NYSE:CCO) Performance Completely

With a price-to-sales (or "P/S") ratio of 0.4x Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) may be sending bullish signals at the moment, given that almost half of all the Media companies in the United States have P/S ratios greater than 1x and even P/S higher than 3x are not unusual. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

View our latest analysis for Clear Channel Outdoor Holdings

What Does Clear Channel Outdoor Holdings' Recent Performance Look Like?

There hasn't been much to differentiate Clear Channel Outdoor Holdings' and the industry's revenue growth lately. One possibility is that the P/S ratio is low because investors think this modest revenue performance may begin to slide. Those who are bullish on Clear Channel Outdoor Holdings will be hoping that this isn't the case.

Keen to find out how analysts think Clear Channel Outdoor Holdings' 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 Clear Channel Outdoor Holdings?

The only time you'd be truly comfortable seeing a P/S as low as Clear Channel Outdoor Holdings' is when the company's growth is on track to lag the industry.

If we review the last year of revenue growth, the company posted a worthy increase of 5.6%. Revenue has also lifted 15% in aggregate from three years ago, partly thanks to the last 12 months of growth. So we can start by confirming that the company has actually done a good job of growing revenue over that time.

Turning to the outlook, the next three years should generate growth of 4.3% per year as estimated by the four analysts watching the company. That's shaping up to be similar to the 4.5% per year growth forecast for the broader industry.

With this information, we find it odd that Clear Channel Outdoor Holdings is trading at a P/S lower than the industry. It may be that most investors are not convinced the company can achieve future growth expectations.

The Key Takeaway

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.

It looks to us like the P/S figures for Clear Channel Outdoor Holdings remain low despite growth that is expected to be in line with other companies in the industry. When we see middle-of-the-road revenue growth like this, we assume it must be the potential risks that are what is placing pressure on the P/S ratio. However, if you agree with the analysts' forecasts, you may be able to pick up the stock at an attractive price.

It is also worth noting that we have found 2 warning signs for Clear Channel Outdoor Holdings (1 is potentially serious!) that you need to take into consideration.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).

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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.