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There's No Escaping Vitrolife AB (publ)'s (STO:VITR) Muted Revenues

Simply Wall St · 2d ago

Vitrolife AB (publ)'s (STO:VITR) price-to-sales (or "P/S") ratio of 5.2x might make it look like a buy right now compared to the Biotechs industry in Sweden, where around half of the companies have P/S ratios above 7x and even P/S above 16x are quite common. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

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Check out our latest analysis for Vitrolife

ps-multiple-vs-industry
OM:VITR Price to Sales Ratio vs Industry December 18th 2025

What Does Vitrolife's Recent Performance Look Like?

Vitrolife hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. It seems that many are expecting the poor revenue performance to persist, which has repressed the P/S ratio. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value.

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

Is There Any Revenue Growth Forecasted For Vitrolife?

In order to justify its P/S ratio, Vitrolife would need to produce sluggish growth that's trailing the industry.

Retrospectively, the last year delivered a frustrating 1.4% decrease to the company's top line. That put a dampener on the good run it was having over the longer-term as its three-year revenue growth is still a noteworthy 21% in total. Although it's been a bumpy ride, it's still fair to say the revenue growth recently has been mostly respectable for the company.

Turning to the outlook, the next three years should generate growth of 7.2% each year as estimated by the four analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 135% each year, which is noticeably more attractive.

In light of this, it's understandable that Vitrolife's P/S sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.

The Key Takeaway

We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.

As expected, our analysis of Vitrolife's analyst forecasts confirms that the company's underwhelming revenue outlook is a major contributor to its low P/S. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. It's hard to see the share price rising strongly in the near future under these circumstances.

A lot of potential risks can sit within a company's balance sheet. You can assess many of the main risks through our free balance sheet analysis for Vitrolife with six simple checks.

Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.