WEBULL

AMG Critical Materials N.V.'s (AMS:AMG) Business Is Yet to Catch Up With Its Share Price

Simply Wall St · 4d ago

There wouldn't be many who think AMG Critical Materials N.V.'s (AMS:AMG) price-to-sales (or "P/S") ratio of 0.7x is worth a mention when the median P/S for the Metals and Mining industry in the Netherlands is similar at about 1x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

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View our latest analysis for AMG Critical Materials

ps-multiple-vs-industry
ENXTAM:AMG Price to Sales Ratio vs Industry January 5th 2026

What Does AMG Critical Materials' P/S Mean For Shareholders?

Recent times haven't been great for AMG Critical Materials as its revenue has been rising slower than most other companies. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. You'd really hope so, otherwise you're paying a relatively elevated price for a company with this sort of growth profile.

Keen to find out how analysts think AMG Critical Materials' future stacks up against the industry? In that case, our free report is a great place to start.

How Is AMG Critical Materials' Revenue Growth Trending?

AMG Critical Materials' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.

Retrospectively, the last year delivered a decent 12% gain to the company's revenues. Still, revenue has barely risen at all in aggregate from three years ago, which is not ideal. Therefore, it's fair to say that revenue growth has been inconsistent recently for the company.

Looking ahead now, revenue is anticipated to climb by 2.8% during the coming year according to the four analysts following the company. That's shaping up to be materially lower than the 5.8% growth forecast for the broader industry.

In light of this, it's curious that AMG Critical Materials' P/S sits in line with the majority of other companies. Apparently many investors in the company are less bearish than analysts indicate and aren't willing to let go of their stock right now. These shareholders may be setting themselves up for future disappointment if the P/S falls to levels more in line with the growth outlook.

The Final Word

Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Our look at the analysts forecasts of AMG Critical Materials' revenue prospects has shown that its inferior revenue outlook isn't negatively impacting its P/S as much as we would have predicted. When we see companies with a relatively weaker revenue outlook compared to the industry, we suspect the share price is at risk of declining, sending the moderate P/S lower. A positive change is needed in order to justify the current price-to-sales ratio.

Having said that, be aware AMG Critical Materials is showing 3 warning signs in our investment analysis, and 1 of those is a bit unpleasant.

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).