WEBULL

Kalray S.A.'s (EPA:ALKAL) Price Is Right But Growth Is Lacking After Shares Rocket 62%

Simply Wall St · 01/05 04:05

Kalray S.A. (EPA:ALKAL) shares have had a really impressive month, gaining 62% after a shaky period beforehand. The last 30 days bring the annual gain to a very sharp 53%.

In spite of the firm bounce in price, when close to half the companies operating in France's Semiconductor industry have price-to-sales ratios (or "P/S") above 2x, you may still consider Kalray as an enticing stock to check out with its 0.4x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

See our latest analysis for Kalray

ps-multiple-vs-industry
ENXTPA:ALKAL Price to Sales Ratio vs Industry January 5th 2026

What Does Kalray's Recent Performance Look Like?

Kalray certainly has been doing a good job lately as its revenue growth has been positive while most other companies have been seeing their revenue go backwards. It might be that many expect the strong revenue performance to degrade substantially, possibly more than the industry, which has repressed the P/S. 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.

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

Do Revenue Forecasts Match The Low P/S Ratio?

Kalray's P/S ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the industry.

Taking a look back first, we see that the company managed to grow revenues by a handy 3.5% last year. The latest three year period has also seen an excellent 119% overall rise in revenue, aided somewhat by its short-term performance. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Shifting to the future, estimates from the three analysts covering the company suggest revenue growth is heading into negative territory, declining 72% over the next year. With the industry predicted to deliver 6.0% growth, that's a disappointing outcome.

With this in consideration, we find it intriguing that Kalray's P/S is closely matching its industry peers. However, shrinking revenues are unlikely to lead to a stable P/S over the longer term. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.

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

Despite Kalray's share price climbing recently, its P/S still lags most other companies. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

As we suspected, our examination of Kalray'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. It's hard to see the share price rising strongly in the near future under these circumstances.

You need to take note of risks, for example - Kalray has 5 warning signs (and 3 which shouldn't be ignored) we think you should know about.

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