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    The Market Lifts Tekmar Group plc (LON:TGP) Shares 33% But It Can Do More

    Simply Wall St·12/11/2025 05:02:24
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    Tekmar Group plc (LON:TGP) shareholders have had their patience rewarded with a 33% share price jump in the last month. While recent buyers may be laughing, long-term holders might not be as pleased since the recent gain only brings the stock back to where it started a year ago.

    Even after such a large jump in price, there still wouldn't be many who think Tekmar Group's price-to-sales (or "P/S") ratio of 0.3x is worth a mention when the median P/S in the United Kingdom's Energy Services industry is similar at about 0.7x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

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    View our latest analysis for Tekmar Group

    ps-multiple-vs-industry
    AIM:TGP Price to Sales Ratio vs Industry December 11th 2025

    What Does Tekmar Group's P/S Mean For Shareholders?

    Tekmar Group hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. One possibility is that the P/S ratio is moderate because investors think this poor revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.

    Keen to find out how analysts think Tekmar Group's future stacks up against the industry? In that case, our free report is a great place to start.

    Do Revenue Forecasts Match The P/S Ratio?

    In order to justify its P/S ratio, Tekmar Group would need to produce growth that's similar to the industry.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 19%. As a result, revenue from three years ago have also fallen 5.1% overall. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

    Shifting to the future, estimates from the sole analyst covering the company suggest revenue should grow by 18% over the next year. That's shaping up to be materially higher than the 4.0% growth forecast for the broader industry.

    In light of this, it's curious that Tekmar Group's P/S sits in line with the majority of other companies. It may be that most investors aren't convinced the company can achieve future growth expectations.

    The Key Takeaway

    Tekmar Group's stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. 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.

    We've established that Tekmar Group currently trades on a lower than expected P/S since its forecasted revenue growth is higher than the wider industry. Perhaps uncertainty in the revenue forecasts are what's keeping the P/S ratio consistent with the rest of the industry. It appears some are indeed anticipating revenue instability, because these conditions should normally provide a boost to the share price.

    And what about other risks? Every company has them, and we've spotted 2 warning signs for Tekmar Group you should know about.

    It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).