Bio-Rad Laboratories, Inc. (NYSE:BIO) shares have had a horrible month, losing 28% after a relatively good period beforehand. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 18% share price drop.

Even after such a large drop in price, there still wouldn't be many who think Bio-Rad Laboratories' price-to-sales (or "P/S") ratio of 3.3x is worth a mention when the median P/S in the United States' Life Sciences industry is similar at about 3.1x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

Check out our latest analysis for Bio-Rad Laboratories

How Has Bio-Rad Laboratories Performed Recently?

Bio-Rad Laboratories could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. It might be that many expect the dour revenue performance to strengthen positively, which has kept the P/S from falling. However, if this isn't the case, investors might get caught out paying too much for the stock.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Bio-Rad Laboratories.

Do Revenue Forecasts Match The P/S Ratio?

In order to justify its P/S ratio, Bio-Rad Laboratories would need to produce growth that's similar to the industry.

Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 3.9%. This means it has also seen a slide in revenue over the longer-term as revenue is down 12% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 2.9% each year during the coming three years according to the six analysts following the company. That's shaping up to be materially lower than the 6.6% per year growth forecast for the broader industry.

With this in mind, we find it intriguing that Bio-Rad Laboratories' P/S is closely matching its industry peers. Apparently many investors in the company are less bearish than analysts indicate and aren't willing to let go of their stock right now. These shareholders may be setting themselves up for future disappointment if the P/S falls to levels more in line with the growth outlook.

What Does Bio-Rad Laboratories' P/S Mean For Investors?

Bio-Rad Laboratories' plummeting stock price has brought its P/S back to a similar region as the rest of the industry. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Our look at the analysts forecasts of Bio-Rad Laboratories' revenue prospects has shown that its inferior revenue outlook isn't negatively impacting its P/S as much as we would have predicted. When we see companies with a relatively weaker revenue outlook compared to the industry, we suspect the share price is at risk of declining, sending the moderate P/S lower. Circumstances like this present a risk to current and prospective investors who may see share prices fall if the low revenue growth impacts the sentiment.

The company's balance sheet is another key area for risk analysis. Take a look at our free balance sheet analysis for Bio-Rad Laboratories with six simple checks on some of these key factors.

If these risks are making you reconsider your opinion on Bio-Rad Laboratories, explore our interactive list of high quality stocks to get an idea of what else is out there.

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