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    With A 38% Price Drop For Toyo Engineering Corporation (TSE:6330) You'll Still Get What You Pay For

    Simply Wall St·02/16/2026 00:06:59
    語音播報

    Toyo Engineering Corporation (TSE:6330) shares have retraced a considerable 38% in the last month, reversing a fair amount of their solid recent performance. Nonetheless, the last 30 days have barely left a scratch on the stock's annual performance, which is up a whopping 495%.

    Although its price has dipped substantially, there still wouldn't be many who think Toyo Engineering's price-to-sales (or "P/S") ratio of 1.2x is worth a mention when the median P/S in Japan's Construction industry is similar at about 0.7x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

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    See our latest analysis for Toyo Engineering

    ps-multiple-vs-industry
    TSE:6330 Price to Sales Ratio vs Industry February 16th 2026

    How Has Toyo Engineering Performed Recently?

    Toyo Engineering hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. It might be that many expect the dour revenue performance to strengthen positively, which has kept the P/S from falling. You'd really hope so, otherwise you're paying a relatively elevated price for a company with this sort of growth profile.

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

    Do Revenue Forecasts Match The P/S Ratio?

    In order to justify its P/S ratio, Toyo Engineering would need to produce growth that's similar to the industry.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 26%. This has erased any of its gains during the last three years, with practically no change in revenue being achieved in total. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.

    Turning to the outlook, the next year should generate growth of 4.6% as estimated by the dual analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 3.3%, which is not materially different.

    In light of this, it's understandable that Toyo Engineering's P/S sits in line with the majority of other companies. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.

    The Key Takeaway

    Toyo Engineering's plummeting stock price has brought its P/S back to a similar region as the rest of the industry. 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 look at Toyo Engineering's revenue growth estimates show that its P/S is about what we expect, as both metrics follow closely with the industry averages. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. If all things remain constant, the possibility of a drastic share price movement remains fairly remote.

    It is also worth noting that we have found 1 warning sign for Toyo Engineering that you need to take into consideration.

    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).