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    ASFLOW Co., LTD. (KOSDAQ:159010) Surges 34% Yet Its Low P/S Is No Reason For Excitement

    Simply Wall St·12/26/2025 22:22:47
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    ASFLOW Co., LTD. (KOSDAQ:159010) shareholders have had their patience rewarded with a 34% share price jump in the last month. The last 30 days bring the annual gain to a very sharp 26%.

    In spite of the firm bounce in price, ASFLOW may still be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.9x, since almost half of all companies in the Semiconductor industry in Korea have P/S ratios greater than 1.6x and even P/S higher than 4x are not unusual. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

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    See our latest analysis for ASFLOW

    ps-multiple-vs-industry
    KOSDAQ:A159010 Price to Sales Ratio vs Industry December 26th 2025

    How ASFLOW Has Been Performing

    For instance, ASFLOW's receding revenue in recent times would have to be some food for thought. One possibility is that the P/S is low because investors think the company won't do enough to avoid underperforming the broader industry in the near future. Those who are bullish on ASFLOW will be hoping that this isn't the case so that they can pick up the stock at a lower valuation.

    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 ASFLOW's earnings, revenue and cash flow.

    Do Revenue Forecasts Match The Low P/S Ratio?

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

    Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 8.6%. The last three years don't look nice either as the company has shrunk revenue by 5.2% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

    Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 49% shows it's an unpleasant look.

    With this in mind, we understand why ASFLOW's P/S is lower than most of its industry peers. 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. Even just maintaining these prices could be difficult to achieve as recent revenue trends are already weighing down the shares.

    What We Can Learn From ASFLOW's P/S?

    ASFLOW's stock price has surged recently, but its but its P/S still remains modest. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

    As we suspected, our examination of ASFLOW revealed its shrinking revenue over the medium-term is contributing to its low P/S, given the industry is set to grow. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises either. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.

    Don't forget that there may be other risks. For instance, we've identified 4 warning signs for ASFLOW (2 are a bit concerning) you should be aware of.

    If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).