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    Quanex Building Products Corporation's (NYSE:NX) Price Is Right But Growth Is Lacking

    Simply Wall St·12/12/2025 10:15:43
    語音播報

    With a price-to-sales (or "P/S") ratio of 0.4x Quanex Building Products Corporation (NYSE:NX) may be sending bullish signals at the moment, given that almost half of all the Building companies in the United States have P/S ratios greater than 1.7x and even P/S higher than 4x are not unusual. 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 Quanex Building Products

    ps-multiple-vs-industry
    NYSE:NX Price to Sales Ratio vs Industry December 12th 2025

    What Does Quanex Building Products' Recent Performance Look Like?

    With revenue growth that's superior to most other companies of late, Quanex Building Products has been doing relatively well. Perhaps the market is expecting future revenue performance to dive, which has kept the P/S suppressed. 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.

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

    How Is Quanex Building Products' Revenue Growth Trending?

    Quanex Building Products' P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the industry.

    Retrospectively, the last year delivered an exceptional 70% gain to the company's top line. The latest three year period has also seen an excellent 53% overall rise in revenue, aided by its short-term performance. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

    Looking ahead now, revenue is anticipated to slump, contracting by 0.7% during the coming year according to the four analysts following the company. Meanwhile, the broader industry is forecast to expand by 5.4%, which paints a poor picture.

    With this in consideration, we find it intriguing that Quanex Building Products' P/S is closely matching its industry peers. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.

    What We Can Learn From Quanex Building Products' P/S?

    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.

    It's clear to see that Quanex Building Products maintains its low P/S on the weakness of its forecast for sliding revenue, as expected. As other companies in the industry are forecasting revenue growth, Quanex Building Products' poor outlook justifies its low P/S ratio. Unless there's material change, it's hard to envision a situation where the stock price will rise drastically.

    It's always necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Quanex Building Products (at least 1 which is potentially serious), and understanding these should be part of your investment process.

    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).