WEBULL

Knowmerce Corp (KOSDAQ:473980) Stocks Shoot Up 28% But Its P/S Still Looks Reasonable

Simply Wall St · 12/31/2025 21:41

Those holding Knowmerce Corp (KOSDAQ:473980) shares would be relieved that the share price has rebounded 28% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Looking back a bit further, it's encouraging to see the stock is up 36% in the last year.

Following the firm bounce in price, given around half the companies in Korea's Entertainment industry have price-to-sales ratios (or "P/S") below 1.6x, you may consider Knowmerce as a stock to avoid entirely with its 4x P/S ratio. 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 Knowmerce

ps-multiple-vs-industry
KOSDAQ:A473980 Price to Sales Ratio vs Industry December 31st 2025

How Knowmerce Has Been Performing

Knowmerce certainly has been doing a good job lately as it's been growing revenue more than most other companies. The P/S is probably high because investors think this strong revenue performance will continue. If not, then existing shareholders might be a little nervous about the viability of the share price.

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

Is There Enough Revenue Growth Forecasted For Knowmerce?

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

Retrospectively, the last year delivered an exceptional 23% gain to the company's top line. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 53% during the coming year according to the two analysts following the company. That's shaping up to be materially higher than the 21% growth forecast for the broader industry.

With this information, we can see why Knowmerce is trading at such a high P/S compared to the industry. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

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

Shares in Knowmerce have seen a strong upwards swing lately, which has really helped boost its P/S figure. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

We've established that Knowmerce maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Entertainment industry, as expected. Right now shareholders are comfortable with the P/S as they are quite confident future revenues aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.

Plus, you should also learn about this 1 warning sign we've spotted with Knowmerce.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).