It's not a stretch to say that BILL Holdings, Inc.'s (NYSE:BILL) price-to-sales (or "P/S") ratio of 4.1x right now seems quite "middle-of-the-road" for companies in the Software industry in the United States, where the median P/S ratio is around 4.8x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
NYSE:BILL Price to Sales Ratio vs Industry August 14th 2024
How BILL Holdings Has Been Performing
BILL Holdings certainly has been doing a good job lately as it's been growing revenue more than most other companies. 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.
Want the full picture on analyst estimates for the company? Then our free report on BILL Holdings will help you uncover what's on the horizon.
What Are Revenue Growth Metrics Telling Us About The P/S?
In order to justify its P/S ratio, BILL Holdings would need to produce growth that's similar to the industry.
Taking a look back first, we see that the company grew revenue by an impressive 29% last year. This great performance means it was also able to deliver immense revenue growth over the last three years. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.
Looking ahead now, revenue is anticipated to climb by 17% each year during the coming three years according to the analysts following the company. Meanwhile, the rest of the industry is forecast to expand by 18% per year, which is not materially different.
In light of this, it's understandable that BILL Holdings' P/S sits in line with the majority of other companies. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.
The Final Word
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.
We've seen that BILL Holdings maintains an adequate P/S seeing as its revenue growth figures match the rest of the industry. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. All things considered, if the P/S and revenue estimates contain no major shocks, then it's hard to see the share price moving strongly in either direction in the near future.
The company's balance sheet is another key area for risk analysis. Our free balance sheet analysis for BILL Holdings with six simple checks will allow you to discover any risks that could be an issue.
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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BILL Holdingsは間違いなく最近良い仕事をしており、多くの他の企業よりも売上高を伸ばしています。強力な売上高パフォーマンスが低下することを多くの人が予想している可能性があり、これによりP/S倍率が上昇することが阻まれています。もし同社が現状を維持することができれば、投資家は売上高に合致する株価報酬を得ることができます。
BILL Holdingsは他の業界と同等の売上高成長を見せており、同社のP/S倍率が適切であることがわかりました。この段階では、売上高に対する向上または悪化の可能性が十分に大きくないため、P/Sが高くも低くも向かうポテンシャルがないという認識を投資家が持っていることが分かります。全てを踏まえると、P/Sと売上高の見積もりが大きなショックを含まない場合、近い将来に株価がどちらの方向にも大きく変動することはないと予想できます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。