Price to sales (P/S)
What you pay for one unit of annual revenue.
Revenue is the hardest line on the income statement to manipulate, so this survives situations where earnings do not.
How it is computed here
Market capitalisation / revenue
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under value. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- It says nothing at all about whether the revenue is profitable. A dollar of software revenue and a dollar of grocery revenue are not the same asset.
- Only comparable inside an industry with similar margin structure.
Questions
How is price to sales calculated?
Market capitalisation / revenue. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does price to sales tell a value investor?
Revenue is the hardest line on the income statement to manipulate, so this survives situations where earnings do not.
When does price to sales mislead?
It says nothing at all about whether the revenue is profitable. A dollar of software revenue and a dollar of grocery revenue are not the same asset. Only comparable inside an industry with similar margin structure.