Getting In Cheap On MYT Netherlands Parent B.V. (NYSE:MYTE) Might Be Difficult

It's not a stretch to say that MYT Netherlands Parent B.V.'s (NYSE:MYTE) price-to-sales (or "P/S") ratio of 0.4x seems quite "middle-of-the-road" for Specialty Retail companies in the United States, seeing as it matches the P/S ratio of the wider industry. 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 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. It might be that many expect the strong revenue performance to wane, which has kept the P/S ratio from rising. 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.

How Is MYT Netherlands Parent B.V's Revenue Growth Trending?

The only time you'd be comfortable seeing a P/S like MYT Netherlands Parent B.V's is when the company's growth is tracking the industry closely.

Retrospectively, the last year delivered a decent 9.2% gain to the company's revenues. Pleasingly, revenue has also lifted 65% in aggregate from three years ago, partly thanks to the last 12 months of growth. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Looking ahead now, revenue is anticipated to climb by 13% during the coming year according to the eight analysts following the company. That's shaping up to be similar to the 15% growth forecast for the broader industry.

With this in mind, it makes sense that MYT Netherlands Parent B.V's P/S is closely matching its industry peers. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.

What We Can Learn From MYT Netherlands Parent B.V's P/S?

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.

Our look at MYT Netherlands Parent B.V's revenue growth estimates show that its P/S is about what we expect, as both metrics follow closely with the industry averages. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. Unless these conditions change, they will continue to support the share price at these levels.

You always need to take note of risks, for example - MYT Netherlands Parent B.V has 1 warning sign we think you should be aware of.

If you're unsure about the strength of MYT Netherlands Parent B.V's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.