Company Health
What is Price-to-Sales (P/S)?
How much investors pay for each dollar of a company's revenue
Full Explanation
P/S ratio = market cap ÷ annual revenue. Useful for valuing companies that aren't profitable yet. A P/S of 5 means investors pay $5 for every $1 of revenue.
Pro Tip
Growth stocks often have high P/S. The question is whether growth justifies the premium.
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