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Further Upside For Precipio, Inc. (NASDAQ:PRPO) Shares Could Introduce Price Risks After 41% Bounce

Simply Wall St · 07/12 14:56

Precipio, Inc. (NASDAQ:PRPO) shares have continued their recent momentum with a 41% gain in the last month alone. The annual gain comes to 232% following the latest surge, making investors sit up and take notice.

Even after such a large jump in price, you could still be forgiven for feeling indifferent about Precipio's P/S ratio of 1.2x, since the median price-to-sales (or "P/S") ratio for the Healthcare industry in the United States is also close to 1x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

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Check out our latest analysis for Precipio

ps-multiple-vs-industry
NasdaqCM:PRPO Price to Sales Ratio vs Industry July 12th 2025

How Has Precipio Performed Recently?

Precipio has been doing a good job lately as it's been growing revenue at a solid pace. It might be that many expect the respectable revenue performance to wane, which has kept the P/S from rising. If that doesn't eventuate, then existing shareholders probably aren't too pessimistic about the future direction of the share price.

Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Precipio will help you shine a light on its historical performance.

Is There Some Revenue Growth Forecasted For Precipio?

Precipio's P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.

If we review the last year of revenue growth, the company posted a terrific increase of 27%. Pleasingly, revenue has also lifted 111% 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.

When compared to the industry's one-year growth forecast of 8.7%, the most recent medium-term revenue trajectory is noticeably more alluring

With this information, we find it interesting that Precipio is trading at a fairly similar P/S compared to the industry. Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.

What We Can Learn From Precipio's P/S?

Precipio's stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. 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.

To our surprise, Precipio revealed its three-year revenue trends aren't contributing to its P/S as much as we would have predicted, given they look better than current industry expectations. It'd be fair to assume that potential risks the company faces could be the contributing factor to the lower than expected P/S. It appears some are indeed anticipating revenue instability, because the persistence of these recent medium-term conditions would normally provide a boost to the share price.

Plus, you should also learn about these 2 warning signs we've spotted with Precipio (including 1 which is significant).

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