With a price-to-sales (or “P/S”) ratio of 1.2x New Gold Inc. (TSE:NGD) may be sending bullish signals at the moment, given that almost half of all the Metals and Mining companies in Canada have P/S ratios greater than 2x and even P/S higher than 14x are not unusual. Although, it’s not wise to just take the P/S at face value as there may be an explanation why it’s limited.
See our latest analysis for New Gold
What Does New Gold’s Recent Performance Look Like?
Recent times haven’t been great for New Gold as its revenue has been rising slower than most other companies. Perhaps the market is expecting the current trend of poor revenue growth to continue, which has kept the P/S suppressed. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.
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