Share Price, page-11581

Is There Enough Revenue Growth Forecasted For Neuren Pharmaceuticals?
The only time you'd be truly comfortable seeing a P/S as steep as Neuren Pharmaceuticals' is when the company's growth is on track to outshine the industry decidedly.Taking a look back first, we see that the company's revenues underwent some rampant growth over the last 12 months. Spectacularly, three year revenue growth has also set the world alight, thanks to the last 12 months of incredible growth. Therefore, it's fair to say the revenue growth recently has been superb for the company.
Turning to the outlook, the next three years should bring diminished returns, with revenue decreasing 0.1% per year as estimated by the six analysts watching the company. Meanwhile, the broader industry is forecast to expand by 14% per annum, which paints a poor picture.
With this information, we find it concerning that Neuren Pharmaceuticals is trading at a P/S higher than the industry. Apparently many investors in the company reject the analyst cohort's pessimism and aren't willing to let go of their stock at any price.
Only the boldest would assume these prices are sustainable as these declining revenues are likely to weigh heavily on the share price eventually.What We Can Learn From Neuren Pharmaceuticals' P/S?While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
For a company with revenues that are set to decline in the context of a growing industry, Neuren Pharmaceuticals' P/S is much higher than we would've anticipated.
Right now we aren't comfortable with the high P/S as the predicted future revenue decline likely to impact the positive sentiment that's propping up the P/S. This places shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.