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Alibaba, Amazon, Costco & Shopify Stock Analysis: Is the Price-To-Sales Ratio Enough?
By Seedly  •  January 16, 2021
When choosing a company to invest in, the first thing we may filter for is a low valuation multiple. But that may be too simplistic.
Source: Giphy Here’s why… Price-to-Sales Ratio (P/S Ratio) Analysis Guide Investors often use the price-to-sales (P/S) multiple to value a company. This makes sense as sales is a proxy for how much cash the company can generate for its shareholders (there’s no way to generate cash without sales). It is also more useful than the price-to-earnings (P/E) ratio when a company is not yet profitable. However, in the stock market, there is a disparity between the P/S ratios that various companies have. Take a look at the table below. It shows the P/S multiples of some prominent “retail” companies around the world: CompanyP/S Ratio Alibaba Group Holdings Ltd (HKG: 9988)8.9 Amazon.com...
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By Seedly
Launched in 2016, Seedly helps users make smarter financial decisions with its budgeting app which allows its 40,000 users to sync up their financial accounts and better manage their cash-flow. Last year, we introduced a new community feature which allows users to crowdsource knowledge from peers before making a financial decision.
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