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    Sotkamo Silver AB's (NGM:SOSI) Shares Leap 38% Yet They're Still Not Telling The Full Story

    Simply Wall St·12/21/2025 06:48:10
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    Despite an already strong run, Sotkamo Silver AB (NGM:SOSI) shares have been powering on, with a gain of 38% in the last thirty days. Looking back a bit further, it's encouraging to see the stock is up 46% in the last year.

    Although its price has surged higher, there still wouldn't be many who think Sotkamo Silver's price-to-sales (or "P/S") ratio of 1.3x is worth a mention when the median P/S in Sweden's Metals and Mining industry is similar at about 1.4x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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    Check out our latest analysis for Sotkamo Silver

    ps-multiple-vs-industry
    NGM:SOSI Price to Sales Ratio vs Industry December 21st 2025

    How Sotkamo Silver Has Been Performing

    Sotkamo Silver could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. One possibility is that the P/S ratio is moderate because investors think this poor revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.

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

    Do Revenue Forecasts Match The P/S Ratio?

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

    Retrospectively, the last year delivered a frustrating 12% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 2.0% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    Looking ahead now, revenue is anticipated to climb by 45% during the coming year according to the sole analyst following the company. With the industry only predicted to deliver 9.1%, the company is positioned for a stronger revenue result.

    With this in consideration, we find it intriguing that Sotkamo Silver's P/S is closely matching its industry peers. It may be that most investors aren't convinced the company can achieve future growth expectations.

    The Key Takeaway

    Sotkamo Silver appears to be back in favour with a solid price jump bringing its P/S back in line with other companies in the industry 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.

    We've established that Sotkamo Silver currently trades on a lower than expected P/S since its forecasted revenue growth is higher than the wider industry. There could be some risks that the market is pricing in, which is preventing the P/S ratio from matching the positive outlook. This uncertainty seems to be reflected in the share price which, while stable, could be higher given the revenue forecasts.

    It is also worth noting that we have found 3 warning signs for Sotkamo Silver (1 is significant!) that you need to take into consideration.

    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).