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    Natuzzi S.p.A. (NYSE:NTZ) Held Back By Insufficient Growth Even After Shares Climb 30%

    Simply Wall St·09/08/2025 11:17:03
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    Natuzzi S.p.A. (NYSE:NTZ) shareholders are no doubt pleased to see that the share price has bounced 30% in the last month, although it is still struggling to make up recently lost ground. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 13% in the last twelve months.

    Although its price has surged higher, when close to half the companies operating in the United States' Consumer Durables industry have price-to-sales ratios (or "P/S") above 0.7x, you may still consider Natuzzi as an enticing stock to check out with its 0.1x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.

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    See our latest analysis for Natuzzi

    ps-multiple-vs-industry
    NYSE:NTZ Price to Sales Ratio vs Industry September 8th 2025

    What Does Natuzzi's P/S Mean For Shareholders?

    For instance, Natuzzi's receding revenue in recent times would have to be some food for thought. It might be that many expect the disappointing revenue performance to continue or accelerate, which has repressed the P/S. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

    We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Natuzzi's earnings, revenue and cash flow.

    Do Revenue Forecasts Match The Low P/S Ratio?

    There's an inherent assumption that a company should underperform the industry for P/S ratios like Natuzzi's to be considered reasonable.

    Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 4.5%. The last three years don't look nice either as the company has shrunk revenue by 30% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 2.4% shows it's an unpleasant look.

    With this information, we are not surprised that Natuzzi is trading at a P/S lower than the industry. However, we think shrinking revenues are unlikely to lead to a stable P/S over the longer term, which could set up shareholders for future disappointment. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.

    The Bottom Line On Natuzzi's P/S

    Natuzzi's stock price has surged recently, but its but its P/S still remains modest. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

    As we suspected, our examination of Natuzzi revealed its shrinking revenue over the medium-term is contributing to its low P/S, given the industry is set to grow. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises either. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.

    You always need to take note of risks, for example - Natuzzi has 2 warning signs we think you should be aware of.

    If you're unsure about the strength of Natuzzi's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.