On Holding AG's (NYSE:ONON) price-to-sales (or "P/S") ratio of 4.2x may look like a poor investment opportunity when you consider close to half the companies in the Luxury industry in the United States have P/S ratios below 0.8x. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.
View our latest analysis for On Holding
What Does On Holding's Recent Performance Look Like?
On Holding certainly has been doing a good job lately as it's been growing revenue more than most other companies. It seems that many are expecting the strong revenue performance to persist, which has raised the P/S. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Keen to find out how analysts think On Holding'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 High P/S?
There's an inherent assumption that a company should far outperform the industry for P/S ratios like On Holding's to be considered reasonable.
Retrospectively, the last year delivered an exceptional 64% gain to the company's top line. 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.
Turning to the outlook, the next three years should generate growth of 26% per annum as estimated by the analysts watching the company. That's shaping up to be materially higher than the 8.4% each year growth forecast for the broader industry.
With this information, we can see why On Holding is trading at such a high P/S compared to the industry. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
What We Can Learn From On Holding's P/S?
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.
We've established that On Holding maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Luxury industry, as expected. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. It's hard to see the share price falling strongly in the near future under these circumstances.
The company's balance sheet is another key area for risk analysis. Take a look at our free balance sheet analysis for On Holding with six simple checks on some of these key factors.
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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On Holding AGの株価/売上高(P/S)倍率は4.2倍であり、米国のラグジュアリー業界の約半数の企業が0.8倍以下のP/S倍率を持っていることを考慮すると、投資機会が低いように見えるかもしれません。しかし、この高いP/S倍率には理由があるかどうかを判断するために、さらなる調査が必要です。
On Holdingについての最新の分析をご覧ください。
On Holdingの最近の業績はどうですか?
On Holdingは、他の多くの企業よりも売上高成長を上げており、最近の強い売上高成長が継続することを期待する声もあり、そのP/S倍率が上昇しました。そうであってほしいと望みます。そうでなければ、特に理由もないままにかなり高い価格を支払うことになってしまいます。
On Holdingの将来についてアナリストがどのように考えているか知りたいですか?それなら、当社の無料レポートがお勧めです。
高いP/S倍率の背後にある理由を知るには、売上高成長指標を見る必要があります。
On HoldingのP/S倍率を合理的と考えるには、業界を大幅に上回る成績を残す必要があるという前提があります。
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。