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Market Participants Recognise KORU Medical Systems, Inc.'s (NASDAQ:KRMD) Revenues Pushing Shares 27% Higher

Simply Wall St · 06/22 12:04

KORU Medical Systems, Inc. (NASDAQ:KRMD) shareholders would be excited to see that the share price has had a great month, posting a 27% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 28%.

After such a large jump in price, when almost half of the companies in the United States' Medical Equipment industry have price-to-sales ratios (or "P/S") below 2.6x, you may consider KORU Medical Systems as a stock probably not worth researching with its 4.4x 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.

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See our latest analysis for KORU Medical Systems

ps-multiple-vs-industry
NasdaqCM:KRMD Price to Sales Ratio vs Industry June 22nd 2025

What Does KORU Medical Systems' P/S Mean For Shareholders?

KORU Medical Systems certainly has been doing a good job lately as it's been growing revenue more than most other companies. It seems the market expects this form will continue into the future, hence the elevated P/S ratio. However, if this isn't the case, investors might get caught out paying too much for the stock.

Keen to find out how analysts think KORU Medical Systems' future stacks up against the industry? In that case, our free report is a great place to start.

Is There Enough Revenue Growth Forecasted For KORU Medical Systems?

In order to justify its P/S ratio, KORU Medical Systems would need to produce impressive growth in excess of the industry.

Retrospectively, the last year delivered an exceptional 20% gain to the company's top line. The latest three year period has also seen an excellent 44% overall rise in revenue, aided by its short-term performance. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Looking ahead now, revenue is anticipated to climb by 15% during the coming year according to the five analysts following the company. With the industry only predicted to deliver 9.5%, the company is positioned for a stronger revenue result.

In light of this, it's understandable that KORU Medical Systems' 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.

What Does KORU Medical Systems' P/S Mean For Investors?

The large bounce in KORU Medical Systems' shares has lifted the company's P/S handsomely. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

As we suspected, our examination of KORU Medical Systems' analyst forecasts revealed that its superior revenue outlook is contributing to its high P/S. At this stage investors feel the potential for a deterioration in revenues is quite remote, justifying the elevated P/S ratio. Unless the analysts have really missed the mark, these strong revenue forecasts should keep the share price buoyant.

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

If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.