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AUROS Technology, Inc. (KOSDAQ:322310) Stock Rockets 26% As Investors Are Less Pessimistic Than Expected

Simply Wall St · 2d ago

AUROS Technology, Inc. (KOSDAQ:322310) shares have had a really impressive month, gaining 26% after a shaky period beforehand. Taking a wider view, although not as strong as the last month, the full year gain of 24% is also fairly reasonable.

After such a large jump in price, given around half the companies in Korea's Semiconductor industry have price-to-sales ratios (or "P/S") below 1.7x, you may consider AUROS Technology as a stock to avoid entirely with its 3.8x 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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View our latest analysis for AUROS Technology

ps-multiple-vs-industry
KOSDAQ:A322310 Price to Sales Ratio vs Industry January 7th 2026

What Does AUROS Technology's Recent Performance Look Like?

With revenue growth that's inferior to most other companies of late, AUROS Technology has been relatively sluggish. One possibility is that the P/S ratio is high because investors think this lacklustre revenue performance will improve markedly. However, if this isn't the case, investors might get caught out paying too much for the stock.

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

What Are Revenue Growth Metrics Telling Us About The High P/S?

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

Taking a look back first, we see that the company grew revenue by an impressive 31% last year. The strong recent performance means it was also able to grow revenue by 145% in total over the last three years. So we can start by confirming that the company has done a great job of growing revenue over that time.

Turning to the outlook, the next year should generate growth of 14% as estimated by the lone analyst watching the company. With the industry predicted to deliver 56% growth, the company is positioned for a weaker revenue result.

With this information, we find it concerning that AUROS Technology is trading at a P/S higher than the industry. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. Only the boldest would assume these prices are sustainable as this level of revenue growth is likely to weigh heavily on the share price eventually.

The Final Word

The strong share price surge has lead to AUROS Technology's P/S soaring as well. 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.

It comes as a surprise to see AUROS Technology trade at such a high P/S given the revenue forecasts look less than stellar. When we see a weak revenue outlook, we suspect the share price faces a much greater risk of declining, bringing back down the P/S figures. Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.

Having said that, be aware AUROS Technology is showing 1 warning sign in our investment analysis, you should know about.

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