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    Why Investors Shouldn't Be Surprised By ASM Group S.A.'s (WSE:ASM) 30% Share Price Plunge

    Simply Wall St·12/31/2025 04:11:33
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    ASM Group S.A. (WSE:ASM) shares have had a horrible month, losing 30% after a relatively good period beforehand. To make matters worse, the recent drop has wiped out a year's worth of gains with the share price now back where it started a year ago.

    Since its price has dipped substantially, ASM Group's price-to-sales (or "P/S") ratio of 0.1x might make it look like a strong buy right now compared to the wider Professional Services industry in Poland, where around half of the companies have P/S ratios above 2.8x and even P/S above 5x are quite common. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.

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    View our latest analysis for ASM Group

    ps-multiple-vs-industry
    WSE:ASM Price to Sales Ratio vs Industry December 31st 2025

    What Does ASM Group's Recent Performance Look Like?

    ASM Group has been doing a decent job lately as it's been growing revenue at a reasonable pace. Perhaps the market believes the recent revenue performance might fall short of industry figures in the near future, leading to a reduced P/S. If that doesn't eventuate, then existing shareholders may have reason to be optimistic about the future direction of the share price.

    Although there are no analyst estimates available for ASM Group, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

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

    The only time you'd be truly comfortable seeing a P/S as depressed as ASM Group's is when the company's growth is on track to lag the industry decidedly.

    Taking a look back first, we see that the company managed to grow revenues by a handy 6.0% last year. Still, lamentably revenue has fallen 5.7% in aggregate from three years ago, which is disappointing. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    In contrast to the company, the rest of the industry is expected to grow by 4.9% over the next year, which really puts the company's recent medium-term revenue decline into perspective.

    In light of this, it's understandable that ASM Group's P/S would sit below the majority of other companies. 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 ASM Group's P/S

    ASM Group's P/S looks about as weak as its stock price lately. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

    It's no surprise that ASM Group maintains its low P/S off the back of its sliding revenue over the medium-term. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. If recent medium-term revenue trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.

    It is also worth noting that we have found 5 warning signs for ASM Group (3 are potentially serious!) that you need to take into consideration.

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