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    FITTERS Diversified Berhad's (KLSE:FITTERS) Low P/S No Reason For Excitement

    Simply Wall St·01/02/2026 23:56:55
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    FITTERS Diversified Berhad's (KLSE:FITTERS) price-to-sales (or "P/S") ratio of 0.2x may look like a pretty appealing investment opportunity when you consider close to half the companies in the Machinery industry in Malaysia have P/S ratios greater than 1.1x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

    We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

    Check out our latest analysis for FITTERS Diversified Berhad

    ps-multiple-vs-industry
    KLSE:FITTERS Price to Sales Ratio vs Industry January 2nd 2026

    What Does FITTERS Diversified Berhad's Recent Performance Look Like?

    Revenue has risen firmly for FITTERS Diversified Berhad recently, which is pleasing to see. One possibility is that the P/S is low because investors think this respectable revenue growth might actually underperform the broader industry in the near future. 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 FITTERS Diversified Berhad's earnings, revenue and cash flow.

    Do Revenue Forecasts Match The Low P/S Ratio?

    In order to justify its P/S ratio, FITTERS Diversified Berhad would need to produce sluggish growth that's trailing the industry.

    Taking a look back first, we see that the company grew revenue by an impressive 21% last year. Despite this strong recent growth, it's still struggling to catch up as its three-year revenue frustratingly shrank by 1.9% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    Comparing that to the industry, which is predicted to deliver 29% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.

    In light of this, it's understandable that FITTERS Diversified Berhad'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 Key Takeaway

    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.

    Our examination of FITTERS Diversified Berhad confirms that the company's shrinking revenue over the past medium-term is a key factor in its low price-to-sales ratio, given the industry is projected to grow. 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.

    We don't want to rain on the parade too much, but we did also find 3 warning signs for FITTERS Diversified Berhad (2 can't be ignored!) that you need to be mindful of.

    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).