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    KGHM Polska Miedz S.A.'s (WSE:KGH) 25% Share Price Surge Not Quite Adding Up

    Simply Wall St·12/14/2025 06:08:45
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    KGHM Polska Miedz S.A. (WSE:KGH) shares have continued their recent momentum with a 25% gain in the last month alone. Looking back a bit further, it's encouraging to see the stock is up 93% in the last year.

    Since its price has surged higher, you could be forgiven for thinking KGHM Polska Miedz is a stock not worth researching with a price-to-sales ratios (or "P/S") of 1.4x, considering almost half the companies in Poland's Metals and Mining industry have P/S ratios below 0.4x. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's as high as it is.

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    Check out our latest analysis for KGHM Polska Miedz

    ps-multiple-vs-industry
    WSE:KGH Price to Sales Ratio vs Industry December 14th 2025

    How KGHM Polska Miedz Has Been Performing

    KGHM Polska Miedz's revenue growth of late has been pretty similar to most other companies. It might be that many expect the mediocre revenue performance to strengthen positively, which has kept the P/S ratio from falling. However, if this isn't the case, investors might get caught out paying too much for the stock.

    Want the full picture on analyst estimates for the company? Then our free report on KGHM Polska Miedz will help you uncover what's on the horizon.

    What Are Revenue Growth Metrics Telling Us About The High P/S?

    In order to justify its P/S ratio, KGHM Polska Miedz would need to produce impressive growth in excess of the industry.

    Taking a look back first, we see that the company managed to grow revenues by a handy 3.2% last year. Although, the latest three year period in total hasn't been as good as it didn't manage to provide any growth at all. Therefore, it's fair to say that revenue growth has been inconsistent recently for the company.

    Turning to the outlook, the next three years should generate growth of 6.9% per year as estimated by the nine analysts watching the company. With the industry predicted to deliver 7.6% growth each year, the company is positioned for a comparable revenue result.

    With this information, we find it interesting that KGHM Polska Miedz is trading at a high P/S compared to the industry. Apparently many investors in the company are more bullish than analysts indicate and aren't willing to let go of their stock right now. These shareholders may be setting themselves up for disappointment if the P/S falls to levels more in line with the growth outlook.

    The Key Takeaway

    The large bounce in KGHM Polska Miedz's shares has lifted the company's P/S handsomely. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

    Analysts are forecasting KGHM Polska Miedz's revenues to only grow on par with the rest of the industry, which has lead to the high P/S ratio being unexpected. When we see revenue growth that just matches the industry, we don't expect elevates P/S figures to remain inflated for the long-term. Unless the company can jump ahead of the rest of the industry in the short-term, it'll be a challenge to maintain the share price at current levels.

    Many other vital risk factors can be found on the company's balance sheet. Our free balance sheet analysis for KGHM Polska Miedz with six simple checks will allow you to discover any risks that could be an issue.

    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).