Slammed 26% FTAI Infrastructure Inc. (NASDAQ:FIP) Screens Well Here But There Might Be A Catch

FTAI Infrastructure Inc. (NASDAQ:FIP) shareholders won't be pleased to see that the share price has had a very rough month, dropping 26% and undoing the prior period's positive performance. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 50% share price drop.

Even after such a large drop in price, it's still not a stretch to say that FTAI Infrastructure's price-to-sales (or "P/S") ratio of 1.1x right now seems quite "middle-of-the-road" compared to the Transportation industry in the United States, where the median P/S ratio is around 1x. 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.

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See our latest analysis for FTAI Infrastructure

What Does FTAI Infrastructure's Recent Performance Look Like?

With revenue growth that's superior to most other companies of late, FTAI Infrastructure 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 not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

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

What Are Revenue Growth Metrics Telling Us About The P/S?

In order to justify its P/S ratio, FTAI Infrastructure would need to produce growth that's similar to the industry.

Retrospectively, the last year delivered an exceptional 32% gain to the company's top line. The latest three year period has also seen an excellent 85% overall rise in revenue, aided by its short-term performance. 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 72% during the coming year according to the three analysts following the company. That's shaping up to be materially higher than the 8.6% growth forecast for the broader industry.

In light of this, it's curious that FTAI Infrastructure's P/S sits in line with the majority of other companies. It may be that most investors aren't convinced the company can achieve future growth expectations.

What We Can Learn From FTAI Infrastructure's P/S?

With its share price dropping off a cliff, the P/S for FTAI Infrastructure looks to be in line with the rest of the Transportation industry. 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.

Despite enticing revenue growth figures that outpace the industry, FTAI Infrastructure'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.

And what about other risks? Every company has them, and we've spotted 3 warning signs for FTAI Infrastructure (of which 2 shouldn't be ignored!) you should know about.

If these risks are making you reconsider your opinion on FTAI Infrastructure, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.