Nasdaq
华尔街日报CorMedix Inc.'s (NASDAQ:CRMD) 28% Jump Shows Its Popularity With Investors
CorMedix Inc. (NASDAQ:CRMD) shares have had a really impressive month, gaining 28% after a shaky period beforehand. The last 30 days bring the annual gain to a very sharp 49%.
Even after such a large jump in price, there still wouldn't be many who think CorMedix's price-to-sales (or "P/S") ratio of 4.6x is worth a mention when the median P/S in the United States' Pharmaceuticals industry is similar at about 4.3x. 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.
See our latest analysis for CorMedix
What Does CorMedix's Recent Performance Look Like?
CorMedix certainly has been doing a good job lately as it's been growing revenue more than most other companies. Perhaps the market is expecting this level of performance to taper off, keeping the P/S from soaring. 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 not quite in favour.
Keen to find out how analysts think CorMedix's future stacks up against the industry? In that case, our free report is a great place to start.How Is CorMedix's Revenue Growth Trending?
In order to justify its P/S ratio, CorMedix would need to produce growth that's similar to the industry.
If we review the last year of revenue growth, we see the company's revenues grew exponentially. Spectacularly, three year revenue growth has also set the world alight, thanks to the last 12 months of incredible growth. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.
Turning to the outlook, the next three years should generate growth of 29% per year as estimated by the seven analysts watching the company. With the industry predicted to deliver 30% growth each year, the company is positioned for a comparable revenue result.
With this in mind, it makes sense that CorMedix's P/S is closely matching its industry peers. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.
The Bottom Line On CorMedix's P/S
CorMedix's stock has a lot of momentum behind it lately, which has brought its P/S level with 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.
We've seen that CorMedix maintains an adequate P/S seeing as its revenue growth figures match the rest of the industry. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. All things considered, if the P/S and revenue estimates contain no major shocks, then it's hard to see the share price moving strongly in either direction in the near future.
Having said that, be aware CorMedix is showing 3 warning signs in our investment analysis, and 1 of those is concerning.
If you're unsure about the strength of CorMedix's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.