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    Investors Don't See Light At End Of Farm Pride Foods Limited's (ASX:FRM) Tunnel And Push Stock Down 26%

    Simply Wall St·12/13/2025 23:47:18
    語音播報

    To the annoyance of some shareholders, Farm Pride Foods Limited (ASX:FRM) shares are down a considerable 26% in the last month, which continues a horrid run for the company. Still, a bad month hasn't completely ruined the past year with the stock gaining 87%, which is great even in a bull market.

    After such a large drop in price, Farm Pride Foods may be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.5x, since almost half of all companies in the Food industry in Australia have P/S ratios greater than 1.1x 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.

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    Check out our latest analysis for Farm Pride Foods

    ps-multiple-vs-industry
    ASX:FRM Price to Sales Ratio vs Industry December 13th 2025

    How Farm Pride Foods Has Been Performing

    Revenue has risen at a steady rate over the last year for Farm Pride Foods, which is generally not a bad outcome. It might be that many expect the respectable revenue performance to degrade, which has repressed the P/S. Those who are bullish on Farm Pride Foods will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.

    Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Farm Pride Foods will help you shine a light on its historical performance.

    Is There Any Revenue Growth Forecasted For Farm Pride Foods?

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

    Taking a look back first, we see that the company managed to grow revenues by a handy 2.6% last year. The latest three year period has also seen an excellent 34% overall rise in revenue, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing revenues over that time.

    Comparing the recent medium-term revenue trends against the industry's one-year growth forecast of 20% shows it's noticeably less attractive.

    With this information, we can see why Farm Pride Foods is trading at a P/S lower than the industry. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the wider industry.

    The Bottom Line On Farm Pride Foods' P/S

    Farm Pride Foods' P/S has taken a dip along with its 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.

    As we suspected, our examination of Farm Pride Foods revealed its three-year revenue trends are contributing to its low P/S, given they look worse than current industry expectations. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.

    You should always think about risks. Case in point, we've spotted 2 warning signs for Farm Pride Foods you should be aware of.

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