There’s one analytical data point that never lies when it comes to determining the undervaluation of a company, and that is the price to sales ratio.
In its recent Q3 report, HS GovTech (CSE: HS) reported a total contract value of $11.41 million for the quarter. HS is currently valued at an MC of $17.31 million, representing a quarterly based PS ratio of 1.52.
HS operates in the healthcare information services industry, which has an average PS ratio of 7.33 (based on yearly earnings). By this metric, based on the company’s Q3 earnings alone, its valuation could be as much as $83.63 million. Even if we take the total healthcare industry average PS ratio of ~4, based on HS’s Q3 earnings, it should be valued over $44 million.
In the company’s recent Q3 report, CEO Silas Garrison stated he sees much more growth potential in the future. Demand from agencies needing to modernize their data solutions continues to increase, and HS is becoming increasingly top of mind with numerous agency leaders across the US and Canada.
HS.c is currently trading at $.375, valued at $17.31 million.
https://ceo.ca/@newswire/hs-govtech-solutions-inc-announces-q3-sales-performance