P/S Ratio (Price-to-Sales Ratio)
A company's market cap compared to its annual revenue.
What it means
The P/S ratio values a company against its sales rather than its profits. It is handy for young or unprofitable companies, like many growth and tech names, that do not yet have meaningful earnings for a P/E.
Formula
P/S = Market Cap ÷ Annual Revenue
Example
A company with a $10 billion market cap and $2 billion in revenue has a P/S of 5.
What is a good P/S Ratio?
Lower is generally cheaper. Many mature companies trade around 1 to 3 times sales; high-growth software can exceed 10 times. Compare within an industry.
See it on real stocks
Every stock analysis page shows P/S Ratio alongside the other key metrics: