Investors Interested In Medicover AB (publ)'s (STO:MCOV B) Revenues

Simply Wall St · 04/14 11:40

When you see that almost half of the companies in the Healthcare industry in Sweden have price-to-sales ratios (or "P/S") below 0.4x, Medicover AB (publ) (STO:MCOV B) looks to be giving off some sell signals with its 1.3x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/S.

We've discovered 1 warning sign about Medicover. View them for free.

Check out our latest analysis for Medicover

ps-multiple-vs-industry
OM:MCOV B Price to Sales Ratio vs Industry April 14th 2025

How Has Medicover Performed Recently?

Medicover certainly has been doing a good job lately as it's been growing revenue more than most other companies. The P/S is probably high because investors think this strong revenue performance will continue. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Medicover.

What Are Revenue Growth Metrics Telling Us About The High P/S?

There's an inherent assumption that a company should outperform the industry for P/S ratios like Medicover's to be considered reasonable.

Retrospectively, the last year delivered an exceptional 20% gain to the company's top line. Pleasingly, revenue has also lifted 52% in aggregate from three years ago, thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing revenue over that time.

Looking ahead now, revenue is anticipated to climb by 13% per annum during the coming three years according to the six analysts following the company. Meanwhile, the rest of the industry is forecast to only expand by 5.4% per year, which is noticeably less attractive.

In light of this, it's understandable that Medicover's P/S sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

The Bottom Line On Medicover's P/S

Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We've established that Medicover maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Healthcare industry, as expected. Right now shareholders are comfortable with the P/S as they are quite confident future revenues aren't under threat. Unless these conditions change, they will continue to provide strong support to the share price.

Before you take the next step, you should know about the 1 warning sign for Medicover that we have uncovered.

If these risks are making you reconsider your opinion on Medicover, explore our interactive list of high quality stocks to get an idea of what else is out there.