Series 79: Price-to-Sales Ratio

Price-to-Sales Ratio

The price-to-sales (P/S) ratio, like P/E, P/B, and P/CF, is another metric for determining whether a stock is over- or undervalued for its industry. It is calculated as:

Revenue per share is normally evaluated on a LTM basis, but forward estimates can be used instead. The P/S ratio can also be calculated by dividing market cap by total revenue.

In simple