Troy Information Technology's limited growth expectations aren't deterring investors, but maintaining current prices may be challenging. A positive change is needed to justify the current price-to-sales ratio.
Despite top line growth, the company still had an EBIT loss over the last year. The business has adequate liquid assets, but the company seems too risky due to its lack of positive free cash flow.
The company's low P/S ratio may be due to expectations of sluggish growth and inconsistent revenue growth. The underwhelming revenue outlook is a major contributor to its low P/S, forming a barrier for the share price.
Despite a disappointing 1.0% loss over the past year, the company's performance isn't as bad as the market's 17% loss. Over five years, the stock has returned 8% per year, suggesting the last year could be a temporary blip towards a brighter future.
Despite robust revenue growth, the company's weak share price and below-industry growth may explain its low P/S ratio. Investors seem to anticipate limited future growth and offer scaled-down investment. A rise in P/S demands a significant upturn in the company's prospects.
Troy Information Technology Stock Forum
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