Earnings Don’t Tell the Story for Atlanta Braves Holdings, Inc. (NASDAQ:BATR.K)

Atlanta Braves Holdings, Inc. (NASDAQ: BATR.K) price-to-sales (or “P/S”) ratio of 3.8x may seem like a poor investment opportunity when you consider that nearly half of the entertainment companies in the United States -United States have a P/S Ratios less than 1.2x. However, the P/S may be quite high for a reason and requires further investigation to determine if this is justified.

Check out our latest analysis for Atlanta Braves Holdings

How Atlanta Braves Holdings Performed

Atlanta Braves Holdings’ recent revenue growth has been in line with the industry. One possibility is that the P/S ratio is high because investors believe this modest earnings performance will accelerate. Otherwise, existing shareholders might be a little nervous about the viability of the share price.

Want to know how analysts think Atlanta Braves Holdings’ future compares to the industry? In this case, our free The report is an excellent starting point.

Do the revenue forecasts match the high P/S ratio?

In order to justify its P/S ratio, Atlanta Braves Holdings would need to produce exceptional growth, well above the industry.

Looking back, the last year delivered a decent 8.9% gain to the company’s revenue. It’s nice to see that revenue is also up 260% in total compared to three years ago, thanks in part to growth over the past 12 months. Therefore, it’s fair to say that recent revenue growth has been superb for the company.

Currently, revenue is expected to grow 6.4% annually over the next three years, according to the four analysts who follow the company. At the same time, the rest of the sector is expected to grow at 9.9% per year, which is significantly more attractive.

In light of this, it’s alarming to see that Atlanta Braves Holdings’ P/S ranks higher than the majority of other companies. Apparently, many investors in the company are much more bullish than analysts suggest and are not willing to give up their shares at any price. Only the boldest would assume these prices are sustainable, as this level of revenue growth is likely to weigh heavily on the stock price down the road.

The last word

As a general rule, we advise against placing too much emphasis on price-to-sales ratios when making investment decisions, even though it can reveal a lot about what other market participants think of the company.

It’s surprising to see Atlanta Braves Holdings trading at such a high P/S given that revenue guidance looks less than stellar. The company’s weak earnings estimate does not bode well for the high P/S, which could fall if earnings sentiment does not improve. At these price levels, investors should remain cautious, especially if the situation does not improve.

Additionally, you should also learn about 2 warning signs we spotted with Atlanta Braves Holdings.

If these risks make you reconsider your opinion on Atlanta Braves Holdingsexplore our interactive list of high quality stocks to get an idea of ​​what else is out there.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.