D-Market Elektronik Hizmetler ve Ticaret A.S.'s (NASDAQ:HEPS) Shares Leap 31% Yet They're Still Not Telling The Full Story

D-Market Elektronik Hizmetler ve Ticaret A.S. (NASDAQ:HEPS) shareholders would be excited to see that the share price has had a great month, posting a 31% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 71%.

Even after such a large jump in price, it's still not a stretch to say that D-Market Elektronik Hizmetler ve Ticaret's price-to-sales (or "P/S") ratio of 0.5x right now seems quite "middle-of-the-road" compared to the Multiline Retail industry in the United States, where the median P/S ratio is around 0.9x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

See our latest analysis for D-Market Elektronik Hizmetler ve Ticaret

How Has D-Market Elektronik Hizmetler ve Ticaret Performed Recently?

Recent times have been advantageous for D-Market Elektronik Hizmetler ve Ticaret as its revenues have been rising faster than most other companies. It might be that many expect the strong revenue performance to wane, which has kept the P/S ratio from rising. 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.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on D-Market Elektronik Hizmetler ve Ticaret.

How Is D-Market Elektronik Hizmetler ve Ticaret's Revenue Growth Trending?

The only time you'd be comfortable seeing a P/S like D-Market Elektronik Hizmetler ve Ticaret's is when the company's growth is tracking the industry closely.

Retrospectively, the last year delivered an exceptional 34% gain to the company's top line. Pleasingly, revenue has also lifted 134% in aggregate from three years ago, thanks to the last 12 months of growth. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Shifting to the future, estimates from the three analysts covering the company suggest revenue should grow by 17% over the next year. That's shaping up to be materially higher than the 15% growth forecast for the broader industry.

In light of this, it's curious that D-Market Elektronik Hizmetler ve Ticaret's P/S sits in line with the majority of other companies. Apparently some shareholders are skeptical of the forecasts and have been accepting lower selling prices.

The Key Takeaway

Its shares have lifted substantially and now D-Market Elektronik Hizmetler ve Ticaret's P/S is back within range of the industry median. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

Despite enticing revenue growth figures that outpace the industry, D-Market Elektronik Hizmetler ve Ticaret's P/S isn't quite what we'd expect. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. This uncertainty seems to be reflected in the share price which, while stable, could be higher given the revenue forecasts.

Don't forget that there may be other risks. For instance, we've identified 2 warning signs for D-Market Elektronik Hizmetler ve Ticaret (1 is significant) you should be aware of.

Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.

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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.