Low Price-to-Sales (P/S) Stocks
100 stocks · Updated Jun 23, 2026
The price-to-sales (P/S) ratio measures a stock's market value relative to its revenue — useful for valuing early-stage growth companies before they achieve profitability, and for identifying potentially undervalued businesses in cyclically depressed earnings environments. A P/S ratio below 1 means the market values the entire company at less than one year's revenue, which is historically an attractive entry point for businesses with improving profitability trajectories.
Get Your Daily Market Recap
TickFlow Daily delivers the top gainers, losers, and signals to your inbox every day at market close. Free.
Frequently Asked Questions
When is P/S more useful than P/E?
P/S is useful when a company has no earnings (losses) or highly volatile earnings. For early-stage growth companies, software pre-profitability, and cyclically depressed businesses, P/S provides a valuation baseline when P/E is negative or meaningless.
What P/S ratio is considered cheap?
P/S below 1 is often considered cheap for established businesses. However, context matters enormously — a software business at P/S of 3 may be cheaper than a retailer at P/S of 0.3 given their very different margin profiles and growth trajectories.
Why is gross margin important when using P/S?
Two companies at P/S of 1x are not equally valued if one has 70% gross margins and the other has 20% margins. The higher-margin business will generate far more profit from the same revenue. Always consider gross margin when interpreting P/S.
Which sectors typically have low P/S ratios?
Retailers, automotive, food manufacturers, and industrial companies typically trade at low P/S ratios (0.2-0.5x) due to thin margins. High P/S ratios are common in software (5-20x) and biotech (variable) where revenue quality differs fundamentally.