Even With A 73% Surge, Cautious Investors Are Not Rewarding MYT Netherlands Parent B.V.'s (NYSE:MYTE) Performance Completely

MYT Netherlands Parent B.V. (NYSE:MYTE) shares have had a really impressive month, gaining 73% after a shaky period beforehand. The last month tops off a massive increase of 114% in the last year.

Although its price has surged higher, there still wouldn't be many who think MYT Netherlands Parent B.V's price-to-sales (or "P/S") ratio of 0.6x is worth a mention when the median P/S in the United States' Specialty Retail industry is similar at about 0.4x. 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.

View our latest analysis for MYT Netherlands Parent B.V

How MYT Netherlands Parent B.V Has Been Performing

With revenue growth that's superior to most other companies of late, MYT Netherlands Parent B.V has been doing relatively well. Perhaps the market is expecting this level of performance to taper off, keeping the P/S from soaring. If the company manages to stay the course, then investors should be rewarded with a share price that matches its revenue figures.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on MYT Netherlands Parent B.V.

Do Revenue Forecasts Match The P/S Ratio?

There's an inherent assumption that a company should be matching the industry for P/S ratios like MYT Netherlands Parent B.V's to be considered reasonable.

Taking a look back first, we see that the company managed to grow revenues by a handy 9.8% last year. This was backed up an excellent period prior to see revenue up by 37% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Shifting to the future, estimates from the five analysts covering the company suggest revenue should grow by 8.2% per year over the next three years. With the industry only predicted to deliver 5.7% per year, the company is positioned for a stronger revenue result.

With this in consideration, we find it intriguing that MYT Netherlands Parent B.V's P/S is closely matching its industry peers. It may be that most investors aren't convinced the company can achieve future growth expectations.

The Bottom Line On MYT Netherlands Parent B.V's P/S

MYT Netherlands Parent B.V's stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

Despite enticing revenue growth figures that outpace the industry, MYT Netherlands Parent B.V's P/S isn't quite what we'd expect. When we see a strong revenue outlook, with growth outpacing the industry, we can only assume potential uncertainty around these figures are what might be placing slight pressure on the P/S ratio. This uncertainty seems to be reflected in the share price which, while stable, could be higher given the revenue forecasts.

Before you take the next step, you should know about the 1 warning sign for MYT Netherlands Parent B.V that we have uncovered.

If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.

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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.