How to Think About Lofty Price-to-Sales Ratios
Often, the go-to metric for investors to judge how "expensive" a stock is compared to its peers is the price-to-earnings ratio. But what if a company is investing all of its profits into growing the business? For growth investors, the price-to-sales ratio is a good way to get an idea of the value of a stock that doesn't have a positive bottom line. On a Fool Live episode recorded on March 3, Fool contributors Brian Withers and Matt Frankel discuss how to think about stocks that have high-double-digit price-to-sales ratios.
Source Fool.com
