Kura Sushi USA, Inc. (NASDAQ:KRUS) shares have continued their recent momentum with a 31% gain in the last month alone. Taking a wider view, although not as strong as the last month, the full year gain of 17% is also fairly reasonable.
Following the firm bounce in price, you could be forgiven for thinking Kura Sushi USA is a stock to steer clear of with a price-to-sales ratios (or “P/S”) of 4x, considering almost half the companies in the United States’ Hospitality industry have P/S ratios below 1.5x. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the highly elevated P/S.
See our latest analysis for Kura Sushi USA
How Kura Sushi USA Has Been Performing
Kura Sushi USA certainly has been doing a good job lately as it’s been growing revenue more than most other companies. The P/S is probably high because investors think this strong revenue performance will continue. You’d really hope so, otherwise you’re paying a pretty hefty price for no particular reason.
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Do Revenue Forecasts Match The High P/S Ratio?
The only time you’d be truly comfortable seeing a P/S as steep as Kura Sushi USA’s is when the company’s growth is on track to outshine the industry decidedly.
Taking a look back first, we see that…
