Key figures

What is the P/S ratio?

P/S stands for price/sales — the share price relative to the company's revenue per share. A P/S of 2 means you pay two years of sales. The figure is used especially when the company is not yet making money, so P/E cannot be calculated.

Why sales and not profit

New and fast-growing companies often make losses for years because they spend everything on growing. Then there is no P/E. But they have revenue — and you can hold the price up against that. P/S is therefore the growth company's ratio.

Example: A company has sales of 50 per share and costs 200. P/S = 4.

How to read it

Below 1: You pay less than one year of sales. Typical for supermarkets, contractors and others with low margins — they sell a lot but earn little per unit.
1–3: Normal for most solid companies.
Above 10: The market expects sales to grow enormously, or margins to become very high. Software and biotech often sit here.

As always: only compare within the same industry. And remember that sales are not profit — a company can sell for billions and lose money on every single transaction.

Kiggo says: P/S tells you what you pay for the sales. It does not tell you whether the sales will ever turn into profit.

The typical beginner's mistake

Using P/S as the only figure on a loss-making company and forgetting to ask whether it will ever make a profit. A low P/S on a company losing money is not cheap — it is a company losing money.

How you see it in Kiggo

Kiggo does not show P/S as a separate figure. But when a company makes a loss, Kiggo says so clearly under "Show key figures": "not stated — this typically happens when the company has a loss … That is worth knowing in itself." That is the most important message P/S would otherwise give you.

Frequently asked questions

When should I use P/S instead of P/E?

When there is no P/E because the company is making a loss — or when profit swings so much from year to year that P/E jumps around. Revenue is more stable.

Is a low P/S good?

Only if the company can make money on the sales. A supermarket at P/S 0.3 is normal. A technology company at P/S 0.3 is usually in trouble.

Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-07.

Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.