The KYOTO KIMONO YUZEN HOLDINGS Co., Ltd. (TSE:7615) share price has softened a substantial 27% over the previous 30 days, handing back much of the gains the stock has made lately. Looking at the bigger picture, even after this poor month the stock is up 88% in the last year.
Although its price has dipped substantially, there still wouldn’t be many who think KYOTO KIMONO YUZEN HOLDINGS’ price-to-sales (or “P/S”) ratio of 0.4x is worth a mention when it essentially matches the median P/S in Japan’s Specialty Retail industry. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
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TSE:7615 Price to Sales Ratio vs Industry September 28th 2025 What Does KYOTO KIMONO YUZEN HOLDINGS’ P/S Mean For Shareholders?
For example, consider that KYOTO KIMONO YUZEN HOLDINGS’ financial performance has been poor lately as its revenue has been in decline. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. If you like the company, you’d at least be hoping this is the case so that you could potentially pick up some stock while it’s not quite in favour.
Although there are no analyst estimates available for KYOTO KIMONO YUZEN HOLDINGS, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow. Is There Some Revenue Growth Forecasted For KYOTO KIMONO YUZEN HOLDINGS?
There’s an inherent assumption that a company should be matching the industry for P/S ratios like KYOTO KIMONO YUZEN HOLDINGS’ to be considered reasonable.
In reviewing the last year of financials, we were disheartened to see the company’s revenues fell to the tune of 14%. The last three years don’t look nice either as the company has shrunk revenue by 36% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.
Comparing that to the industry, which is predicted to deliver 7.3% growth in the next 12 months, the company’s downward momentum based on recent medium-term revenue results is a sobering picture.
With this in mind, we find it worrying that KYOTO KIMONO YUZEN HOLDINGS’ P/S exceeds that of its industry peers. Apparently many investors in the company are way less bearish than recent times would indicate and aren’t willing to let go of their stock right now. There’s a good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
The Key Takeaway
KYOTO KIMONO YUZEN HOLDINGS’ plummeting stock price has brought its P/S back to a similar region as the rest of the industry. It’s argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
Our look at KYOTO KIMONO YUZEN HOLDINGS revealed its shrinking revenues over the medium-term haven’t impacted the P/S as much as we anticipated, given the industry is set to grow. When we see revenue heading backwards in the context of growing industry forecasts, it’d make sense to expect a possible share price decline on the horizon, sending the moderate P/S lower. Unless the recent medium-term conditions improve markedly, investors will have a hard time accepting the share price as fair value.
Don’t forget that there may be other risks. For instance, we’ve identified 4 warning signs for KYOTO KIMONO YUZEN HOLDINGS (2 make us uncomfortable) you should be aware of.
If you’re unsure about the strength of KYOTO KIMONO YUZEN HOLDINGS’ business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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