Eos Energy Enterprises, Inc. (NASDAQ:EOSE) shares have had a horrible month, losing 29% after a relatively good period beforehand. For any long-term shareholders, the last month ends a year to forget by locking in a 68% share price decline.
Even after such a large drop in price, you could still be forgiven for thinking Eos Energy Enterprises is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 9.2x, considering almost half the companies in the United States' Electrical industry have P/S ratios below 1.7x. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.
What Does Eos Energy Enterprises' P/S Mean For Shareholders?
Eos Energy Enterprises hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. Perhaps the market is expecting the poor revenue to reverse, justifying it's current high P/S.. However, if this isn't the case, investors might get caught out paying too much for the stock.
Want the full picture on analyst estimates for the company? Then our free report on Eos Energy Enterprises will help you uncover what's on the horizon.
Is There Enough Revenue Growth Forecasted For Eos Energy Enterprises?
In order to justify its P/S ratio, Eos Energy Enterprises would need to produce outstanding growth that's well in excess of the industry.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 8.6%. Spectacularly, three year revenue growth has ballooned by several orders of magnitude, despite the drawbacks experienced in the last 12 months. So while the company has done a great job in the past, it's somewhat concerning to see revenue growth decline so harshly.
Looking ahead now, revenue is anticipated to climb by 288% per annum during the coming three years according to the seven analysts following the company. That's shaping up to be materially higher than the 34% each year growth forecast for the broader industry.
With this information, we can see why Eos Energy Enterprises is trading at such a high P/S compared to the industry. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From Eos Energy Enterprises' P/S?
Eos Energy Enterprises' shares may have suffered, but its P/S remains high. 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 into Eos Energy Enterprises shows that its P/S ratio remains high on the merit of its strong future revenues. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. Unless these conditions change, they will continue to provide strong support to the share price.
Before you take the next step, you should know about the 4 warning signs for Eos Energy Enterprises (3 shouldn't be ignored!) that we have uncovered.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
Eos Energy Energy Enterprises, Inc.(納斯達克股票代碼:EOSE)的股價經歷了一個糟糕的月份,在經歷了相對不錯的時期之後下跌了29%。對於任何長期股東來說,最後一個月的股價下跌幅度爲68%,從而結束了令人難忘的一年。
即使在價格大幅下跌之後,考慮到美國電氣行業將近一半公司的市盈率低於1.7倍,你仍然認爲Eos Energy Energy Enerprises是一隻值得避開的股票,其市銷率(或 “市盈率”)爲9.2倍,這是可以原諒的。但是,僅按面值計算市銷率是不明智的,因爲可以解釋其爲何如此之高。
Eos能源企業的市銷率對股東意味着什麼?
Eos Energy Energy Enterprises最近表現不佳,其收入下降與其他公司相比表現不佳,後者的平均收入有所增長。也許市場預計收入不佳的情況將逆轉,這證明了目前的高市銷率是合理的。但是,如果不是這樣,投資者可能會陷入爲股票支付過多費用的困境。
想全面了解分析師對公司的估計嗎?然後,我們關於Eos Energy Energy Enterprises的免費報告將幫助您發現即將發生的事情。
預計Eos Energy企業的收入增長是否足夠?
爲了證明其市銷率是合理的,Eos Energy Energy Enterprises需要實現遠遠超過該行業的出色增長。