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Umicore SA (EBR:UMI) Stock Catapults 25% Though Its Price And Business Still Lag The Industry

Simply Wall St · 2d ago

Umicore SA (EBR:UMI) shareholders have had their patience rewarded with a 25% share price jump in the last month. Looking back a bit further, it's encouraging to see the stock is up 77% in the last year.

Although its price has surged higher, given about half the companies operating in Belgium's Chemicals industry have price-to-sales ratios (or "P/S") above 0.8x, you may still consider Umicore as an attractive investment with its 0.3x P/S ratio. 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 Umicore

ps-multiple-vs-industry
ENXTBR:UMI Price to Sales Ratio vs Industry December 26th 2025

What Does Umicore's Recent Performance Look Like?

Recent times have been pleasing for Umicore as its revenue has risen in spite of the industry's average revenue going into reverse. One possibility is that the P/S ratio is low because investors think the company's revenue is going to fall away like everyone else's soon. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

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

Do Revenue Forecasts Match The Low P/S Ratio?

The only time you'd be truly comfortable seeing a P/S as low as Umicore's is when the company's growth is on track to lag the industry.

If we review the last year of revenue growth, the company posted a worthy increase of 2.5%. Ultimately though, it couldn't turn around the poor performance of the prior period, with revenue shrinking 34% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to slump, contracting by 38% each year during the coming three years according to the analysts following the company. With the industry predicted to deliver 2.6% growth per annum, that's a disappointing outcome.

With this information, we are not surprised that Umicore is trading at a P/S lower than the industry. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.

The Bottom Line On Umicore's P/S

Despite Umicore's share price climbing recently, its P/S still lags most other companies. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

As we suspected, our examination of Umicore's analyst forecasts revealed that its outlook for shrinking revenue is contributing to its low P/S. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless there's material change, it's hard to envision a situation where the stock price will rise drastically.

You should always think about risks. Case in point, we've spotted 4 warning signs for Umicore you should be aware of, and 2 of them can't be ignored.

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