Meyer Burger Technology AG (VTX:MBTN) shares still lack positive sentiment after a 56% drop in stock price

We apologize for the inconvenience caused to some shareholders, but Meyer Berger Technology AG (VTX:MBTN)'s stock price is down a massive 56% in the last month, and the company's poor management continues. For long-term shareholders, the final month will end his year to forget, locking in his 98% drop in stock price.

Despite the significant decline in prices, it would be no exaggeration to say that Meyer Berger Technology's current price-to-sales (or “P/S”) ratio of 2x is quite “middling” by comparison. Not. In the Swiss semiconductor industry, the median P/S ratio is approximately 2.3x. However, it is unwise to simply ignore the income statement without explanation, as investors may be ignoring clear opportunities or costly mistakes.

Check out our latest analysis for Meyer Burger Technology.

What does Meyer Berger Technology's P/S mean for shareholders?

While most other companies have experienced positive revenue growth, Mayer Berger Technology's earnings have retreated recently, so its performance could be even better. The market is probably hoping that the P/S will not decline and the weak earnings performance will improve. If so, you'll be paying a relatively high price for a company with this kind of growth profile.

If you want to know what analysts are predicting for the future, check out this article. free Report on Mayer Burger Technology.

What do revenue growth metrics tell you about your bottom line?

There is an inherent assumption that for a P/S ratio like Meyer Burger Technology's to be considered reasonable, the company must be in line with its industry.

When I reviewed last year's financials, I was disappointed to see that our revenue declined by 8.3%. Still, despite the unsatisfactory short-term results, his most recent three-year period saw an impressive overall revenue increase of 49%. Although it has been a bumpy road, it is no exaggeration to say that recent revenue growth has been more than sufficient for the company.

Looking at the outlook, the seven analysts who monitor the company estimate that it is expected to grow 79% annually over the next three years. Meanwhile, the rest of the industry is expected to grow only 15% annually, making it significantly less attractive.

With this information, we find it interesting that Meyer Burger Technology is trading at a similar P/S compared to its industry. Perhaps most investors are not convinced that the company can achieve its future growth expectations.

Important points

With the stock price falling off a cliff, Mayer Berger Technology's earnings appear to be in line with the rest of the semiconductor industry. Although it is not wise to use the price-to-sales ratio alone to decide whether to sell a stock, it can be a practical guide to a company's future prospects.

Meyer Burger Technology's expected earnings growth rate is higher than the industry as a whole, so we're seeing that Meyer Burger Technology's P&L is currently lower than expected. Perhaps the uncertainty in the earnings forecast is keeping the P/S ratio in line with other companies in the industry. At least the risk of price declines appears to be contained, but investors seem to believe there could be some volatility in future returns.

You should always think about risk.Good example we found 2 warning signs for Meyer Burger Technology you should know.

If you're interested in strong companies that are profitable, then you might want to check this out. free A list of interesting companies that trade at low P/E ratios (but have proven they can grow earnings).

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.