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After Leaping 43% DigitalBridge Group, Inc. (NYSE:DBRG) Shares Are Not Flying Under The Radar

Simply Wall St · 2d ago

DigitalBridge Group, Inc. (NYSE:DBRG) shareholders would be excited to see that the share price has had a great month, posting a 43% gain and recovering from prior weakness. Looking further back, the 24% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.

Following the firm bounce in price, you could be forgiven for thinking DigitalBridge Group is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 25.3x, considering almost half the companies in the United States' Capital Markets industry have P/S ratios below 4x. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.

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Check out our latest analysis for DigitalBridge Group

ps-multiple-vs-industry
NYSE:DBRG Price to Sales Ratio vs Industry December 29th 2025

What Does DigitalBridge Group's Recent Performance Look Like?

While the industry has experienced revenue growth lately, DigitalBridge Group's revenue has gone into reverse gear, which is not great. One possibility is that the P/S ratio is high because investors think this poor revenue performance will turn the corner. If not, then existing shareholders may be extremely nervous about the viability of the share price.

Want the full picture on analyst estimates for the company? Then our free report on DigitalBridge Group will help you uncover what's on the horizon.

How Is DigitalBridge Group's Revenue Growth Trending?

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

In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 89%. This means it has also seen a slide in revenue over the longer-term as revenue is down 92% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

Turning to the outlook, the next three years should generate growth of 74% each year as estimated by the seven analysts watching the company. That's shaping up to be materially higher than the 7.9% per annum growth forecast for the broader industry.

With this in mind, it's not hard to understand why DigitalBridge Group's P/S is high relative to its industry peers. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

What We Can Learn From DigitalBridge Group's P/S?

The strong share price surge has lead to DigitalBridge Group's P/S soaring as well. 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 we suspected, our examination of DigitalBridge Group's analyst forecasts revealed that its superior revenue outlook is contributing to its high P/S. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. Unless these conditions change, they will continue to provide strong support to the share price.

Don't forget that there may be other risks. For instance, we've identified 2 warning signs for DigitalBridge Group that you should be aware of.

If you're unsure about the strength of DigitalBridge Group's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.