Unfortunately for some shareholders, the EZFill Holdings Inc. (NASDAQ:EZFL) share price has dived 27% in the last thirty days, prolonging recent pain.    The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 49% in that time.  

Since its price has dipped substantially, EZFill Holdings may be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.3x, since almost half of all companies in the Oil and Gas industry in the United States have P/S ratios greater than 1.7x and even P/S higher than 4x are not unusual.   Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.  

Check out our latest analysis for EZFill Holdings

NasdaqCM:EZFL Price to Sales Ratio vs Industry November 30th 2023

How Has EZFill Holdings Performed Recently?

Recent times have been quite advantageous for EZFill Holdings as its revenue has been rising very briskly.   Perhaps the market is expecting future revenue performance to dwindle, which has kept the P/S suppressed.  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 out of favour.    

Want the full picture on earnings, revenue and cash flow for the company? Then our free report on EZFill Holdings will help you shine a light on its historical performance.  

Is There Any Revenue Growth Forecasted For EZFill Holdings?  

The only time you'd be truly comfortable seeing a P/S as low as EZFill Holdings' is when the company's growth is on track to lag the industry.  

Taking a look back first, we see that the company grew revenue by an impressive 84% last year.    This great performance means it was also able to deliver immense revenue growth over the last three years.  Therefore, it's fair to say the revenue growth recently has been superb for the company.  

Comparing that to the industry, which is only predicted to deliver 4.5% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised revenue results.

In light of this, it's peculiar that EZFill Holdings' P/S sits below the majority of other companies.  Apparently some shareholders believe the recent performance has exceeded its limits and have been accepting significantly lower selling prices.  

What We Can Learn From EZFill Holdings' P/S?

EZFill Holdings' recently weak share price has pulled its P/S back below other Oil and Gas companies.      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.

Our examination of EZFill Holdings revealed its three-year revenue trends aren't boosting its P/S anywhere near as much as we would have predicted, given they look better than current industry expectations.  When we see strong revenue with faster-than-industry growth, we assume there are some significant underlying risks to the company's ability to make money which is applying downwards pressure on the P/S ratio.  At least price risks look to be very low if recent medium-term revenue trends continue, but investors seem to think future revenue could see a lot of volatility.    

We don't want to rain on the parade too much, but we did also find 4 warning signs for EZFill Holdings (3 are a bit unpleasant!) that you need to be mindful of.  

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.

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.