Price to Sales Ratio (TTM)
Returns the Price to Sales ratio, which compares a company's stock price to its revenue per share. Useful for valuing companies with negative earnings.
P/S Formula
P/S Ratio = Market Cap / Total Revenue Or: P/S Ratio = Stock Price / Revenue Per Share
Understanding P/S
| P/S Range | General Interpretation |
|---|---|
| < 1 | Potentially undervalued |
| 1-2 | Fairly valued (varies by industry) |
| 2-5 | Growth premium |
| > 5 | High growth expectations |
Advantages of P/S
- Works for unprofitable companies: Unlike P/E
- Less manipulable: Revenue is harder to manipulate than earnings
- Stable metric: Revenue is less volatile than earnings
- Industry comparison: Good for comparing similar companies
Parameters
| Parameter | Description |
|---|---|
| Symbol | Stock ticker symbol |
Examples
=PricePerSales("AAPL")=PricePerSales("MSFT")=PricePerSales("AMZN")=PricePerSales("TSLA")=PricePerSales(A1)When to Use
- Value companies with negative earnings
- Compare companies in the same industry
- Screen for potentially undervalued stocks
- Growth stock analysis
- Relative valuation
When NOT to Use
| Scenario | Use Instead |
|---|---|
| Need earnings-based valuation | PERatio() |
| Need book value-based valuation | PricePerBook() |
| Need cash flow-based valuation | CashFlowPerShare() for calculations |
| Need EV-based multiple | Enterprise value functions |
Common Issues & FAQ
Q: Why is P/S returning "NA"? A: Check that:
- The symbol is valid
- The company has revenue data
- Financial statements are available
Q: Why compare P/S within industries? A: Different industries have different typical P/S ranges. Tech companies often have higher P/S than retail companies.
Q: Is this TTM or forward? A: This returns TTM (Trailing Twelve Months) P/S ratio.
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