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    There's Reason For Concern Over Lunit Inc.'s (KOSDAQ:328130) Massive 28% Price Jump

    Simply Wall St·12/22/2025 22:34:52
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    Lunit Inc. (KOSDAQ:328130) shareholders would be excited to see that the share price has had a great month, posting a 28% gain and recovering from prior weakness. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 30% in the last twelve months.

    Following the firm bounce in price, Lunit's price-to-sales (or "P/S") ratio of 16.7x might make it look like a strong sell right now compared to other companies in the Healthcare Services industry in Korea, where around half of the companies have P/S ratios below 5.2x and even P/S below 1.7x are quite common. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.

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    See our latest analysis for Lunit

    ps-multiple-vs-industry
    KOSDAQ:A328130 Price to Sales Ratio vs Industry December 22nd 2025

    How Has Lunit Performed Recently?

    Lunit certainly has been doing a good job lately as it's been growing revenue more than most other companies. It seems the market expects this form will continue into the future, hence the elevated P/S ratio. If not, then existing shareholders might be a little nervous about the viability of the share price.

    If you'd like to see what analysts are forecasting going forward, you should check out our free report on Lunit.

    How Is Lunit's Revenue Growth Trending?

    The only time you'd be truly comfortable seeing a P/S as steep as Lunit's is when the company's growth is on track to outshine the industry decidedly.

    If we review the last year of revenue growth, the company posted a terrific increase of 94%. This great performance means it was also able to deliver immense revenue growth over the last three years. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.

    Shifting to the future, estimates from the lone analyst covering the company suggest revenue should grow by 19% over the next year. That's shaping up to be materially lower than the 29% growth forecast for the broader industry.

    With this in consideration, we believe it doesn't make sense that Lunit's P/S is outpacing its industry peers. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. Only the boldest would assume these prices are sustainable as this level of revenue growth is likely to weigh heavily on the share price eventually.

    The Bottom Line On Lunit's P/S

    Lunit's P/S has grown nicely over the last month thanks to a handy boost in the share price. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

    It comes as a surprise to see Lunit trade at such a high P/S given the revenue forecasts look less than stellar. Right now we aren't comfortable with the high P/S as the predicted future revenues aren't likely to support such positive sentiment for long. At these price levels, investors should remain cautious, particularly if things don't improve.

    And what about other risks? Every company has them, and we've spotted 4 warning signs for Lunit (of which 2 are significant!) you should know about.

    If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.