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Price-to-Sales Ratio Screener — Find Undervalued Growth Stocks
Mid and large-cap stocks ranked by price-to-sales ratio, with every row labeled by valuation tier — from deep value names trading below 1× annual revenue to growth compounders commanding premium multiples. Pair it with the Revenue Growth Screener and P/E Ratio Screener to find quality growth at a reasonable price.
How to Read P/S Ratio Data
The price-to-sales ratio answers a fundamental question: how much is the market paying for each dollar of annual revenue? A business with $5 billion in sales and a $15 billion market cap trades at 3× sales — investors are paying three dollars for every dollar of yearly revenue. Unlike earnings-based multiples, P/S cannot be gamed by accounting choices around depreciation, stock compensation, or tax timing. Revenue is the hardest line on the income statement to manipulate, making P/S a particularly clean lens for comparing businesses across capital structures and growth stages.
The valuation tier badge is the organizing feature of this screener. Every row is labeled: Deep Value for P/S below 1×, Value for the 1–3× range, Fair for 3–6×, and Growth Premium above 6×. A Deep Value P/S in a commodity business is a different signal than a Deep Value P/S in a software company — cross the sector filter with the tier filter to narrow to names worth investigating in your area of expertise.
P/S is most useful when paired with gross margin data. A 5× P/S is cheap for a SaaS company with 75% gross margins because those margins convert to durable profits at scale. The same 5× P/S is expensive for a distribution business with 10% gross margins where every dollar of revenue leaves very little for investors after costs. The Gross Margin Screener is the natural companion to P/S analysis.
P/S Ratio vs. P/E: When Each Is Better
The P/E ratio is the most widely used valuation multiple, but it breaks down whenever earnings are negative, artificially depressed, or structurally irrelevant. Early-stage software companies, biotech, and pre-profitability growth businesses all have this problem — their earnings are intentionally negative as they invest in future growth. P/S sidesteps the issue entirely: revenue exists even when earnings do not. For mature, profitable businesses, P/E and P/S should tell a consistent story. A divergence — a low P/S alongside a high P/E — often signals a margin compression story where the market believes the business will earn less per dollar of revenue than it historically has.
When High P/S Is Justified
The fastest-growing software companies routinely trade at 10–20× sales or higher. The market is pricing in years of compounding revenue growth, not the current multiple alone. A business growing revenue at 30% annually will have its P/S cut in half in roughly three years if the price stays flat — the market embeds this forward math. What looks expensive at 15× sales today can look cheap in hindsight if the company executes. The risk is the reverse: a company that decelerates from 30% to 10% growth will see its multiple compress sharply, even if revenue is still rising. High P/S is a bet on sustained growth, and the margin for error is narrow.
Frequently asked questions
Is a low P/S ratio always a buy signal?
Not necessarily. A low P/S in a high-margin business is often a strong signal — the market underestimates how much profit will emerge from each dollar of revenue. But a low P/S in a structurally declining business, or one with thin margins and high capital requirements, may reflect justified skepticism. Always ask: why is this trading below 1× sales? If the answer is cyclical pessimism or temporary margin compression, the discount may resolve. If the answer is secular decline, it may not.
Why do software companies have such high P/S ratios?
Software businesses benefit from high gross margins (typically 60–80%), recurring subscription revenue, and near-zero marginal cost to serve new customers. Each dollar of software revenue is worth far more than a dollar of manufacturing or retail revenue because the incremental profit per customer is so high. The market correctly prices this structural advantage into the multiple. A 10× P/S for a software company with 75% gross margins and 30% revenue growth is not irrational — it reflects the compounding potential embedded in the business model.
How does P/S compare to EV/Revenue?
P/S uses market capitalization as the numerator, while EV/Revenue uses enterprise value — market cap plus net debt. For companies with significant debt or large cash balances, EV/Revenue gives a more apples-to-apples comparison because it accounts for capital structure. A company with $5B in net debt and a $10B market cap has an EV of $15B, making EV/Revenue 50% higher than P/S on the same revenue base. For companies with clean balance sheets, the two ratios are nearly identical.
Can P/S ratio be negative?
No — revenue cannot be negative (a business with negative revenue has a data problem, not a real financial condition). However, P/S can be extremely high when revenue is very small relative to a large market cap, or effectively infinite if the company has zero reported revenue. This screener excludes tickers with null or zero revenue to avoid misleading displays. The screener is most useful for established businesses with at least several hundred million in annual revenue.
How do I use this screener to find investment ideas?
Sort by P/S ascending to surface the cheapest-to-revenue names, then filter by sector to narrow to areas you understand. Use the tier buttons to focus on Deep Value or Value names for a contrarian screen, or filter for Growth Premium names to see which high-multiple businesses the market is most excited about. Click any ticker to open the Basis Report stock intelligence page, where you can cross-reference P/S with revenue growth, gross margin, and generate a full research report.
Why are some tickers excluded from the screener?
The screener excludes tickers where Yahoo Finance returns a null or zero P/S ratio and any ticker with a P/S above 50× (extreme outliers that usually indicate early-stage companies or data errors). Around 90 curated mid/large-cap names are in scope across seven sectors; the actual count in the table reflects those that pass the data-quality filter on any given run.