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    Revenues Tell The Story For EuropaCorp (EPA:ALECP) As Its Stock Soars 29%

    Simply Wall St·01/08/2026 04:20:57
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    EuropaCorp (EPA:ALECP) shareholders would be excited to see that the share price has had a great month, posting a 29% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 50%.

    Since its price has surged higher, given close to half the companies operating in France's Entertainment industry have price-to-sales ratios (or "P/S") below 0.7x, you may consider EuropaCorp as a stock to potentially avoid with its 1.8x P/S ratio. However, the P/S might be high for a reason and it requires further investigation to determine if it's justified.

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    See our latest analysis for EuropaCorp

    ps-multiple-vs-industry
    ENXTPA:ALECP Price to Sales Ratio vs Industry January 8th 2026

    How EuropaCorp Has Been Performing

    Recent times have been pleasing for EuropaCorp as its revenue has risen in spite of the industry's average revenue going into reverse. Perhaps the market is expecting the company's future revenue growth to buck the trend of the industry, contributing to a higher P/S. If not, then existing shareholders might be a little nervous about the viability of the share price.

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

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

    There's an inherent assumption that a company should outperform the industry for P/S ratios like EuropaCorp's to be considered reasonable.

    Retrospectively, the last year delivered virtually the same number to the company's top line as the year before. Still, the latest three year period was better as it's delivered a decent 9.1% overall rise in revenue. Therefore, it's fair to say that revenue growth has been inconsistent recently for the company.

    Turning to the outlook, the next year should generate growth of 15% as estimated by the sole analyst watching the company. Meanwhile, the rest of the industry is forecast to only expand by 1.1%, which is noticeably less attractive.

    With this in mind, it's not hard to understand why EuropaCorp's P/S is high relative to its industry peers. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

    The Bottom Line On EuropaCorp's P/S

    EuropaCorp's P/S is on the rise since its shares have risen strongly. 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 EuropaCorp maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Entertainment industry, as expected. At this stage investors feel the potential for a deterioration in revenues is quite remote, justifying the elevated P/S ratio. Unless these conditions change, they will continue to provide strong support to the share price.

    We don't want to rain on the parade too much, but we did also find 3 warning signs for EuropaCorp (1 can't be ignored!) that you need to be mindful of.

    If these risks are making you reconsider your opinion on EuropaCorp, explore our interactive list of high quality stocks to get an idea of what else is out there.