LiveRamp Holdings, Inc. (NYSE:RAMP) shares lag the industry, but so does the business

of LiveRamp Holdings, Inc. (NYSE:RAMP) With a 2.8x price-to-sales ratio (P/S), compared to the U.S. software industry, where about half of companies achieve P/S, now seems like a good time to buy. It may look The S ratio is often over 4.2x and the P/S is over 9x. However, there may be some reason for the low P/S and further investigation is needed to determine if it is justified.

Read the latest analysis from LiveRamp Holdings.

What are LiveRamp Holdings’ recent performances?

LiveRamp Holdings has been relatively weak, with revenue growth lagging behind most other companies recently. It seems that the growth of the P/S ratio is being restrained as many view that the poor earnings performance will continue. If you still like the company, you hope earnings don’t get any worse and you can buy stock while it’s no longer popular.

Want a full picture of what analysts are forecasting for the company? free A report on LiveRamp Holdings helps reveal what’s to come.

What do revenue growth metrics tell you about low P/S?

LiveRamp Holdings’ P/S ratio is typical of companies with limited growth potential and, importantly, underperforming the industry.

Historically, the company’s revenue increased by 13% last year. Even in his last three years, he has seen an impressive 57% revenue growth overall, helped in part by short-term performance. So we can start by making sure the company has been doing a great job growing revenue over that period.

Looking to the outlook, the nine analysts who monitor the company estimate that it should deliver 9.9% annual growth over the next three years. This number is expected to be well below the 13% annual growth forecast for the industry as a whole.

With this information, you can see why LiveRamp Holdings is trading at a lower P/S than the industry. Most investors expect limited future growth and are only willing to reduce their stock purchases.

What can we learn from LiveRamp Holdings’ P/S?

The power of the price-to-sales ratio is not primarily a valuation tool, but rather a gauge of current investor sentiment and future expectations.

As we expected, our analysis of LiveRamp Holdings analyst forecasts reveals that a weaker earnings outlook contributed to the lower P/S. Shareholders’ pessimistic view of the company’s earnings outlook seems to be the main reason for the slump in P/S. The company will have to change its fortunes to justify higher P/S in the future.

It is also worth noting that we discovered One Warning Sign for LiveRamp Holdings what you need to consider.

in these cases Risks force me to reconsider my opinion on LiveRamp Holdingsexplore our interactive list of quality stocks to find out what else we have.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst projections, and articles are not intended as financial advice. This is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to provide long-term focused analysis based on underlying data. Please note that our analysis may not take into account the latest announcements or qualitative material from price-sensitive companies. Simply Wall St does not have any positions in any of the securities mentioned.