Low Price to Sales US Stocks — P/S Below 1 with Positive Margins on NYSE & NASDAQ

Price-to-Sales (P/S) = Market Cap / Annual Revenue. It measures how much the market pays for each dollar of revenue. P/S is particularly useful when earnings are temporarily depressed or when comparing businesses with different margin profiles. A P/S below 1 means the market values the company at less than one year's revenue — historically cheap for most profitable businesses.

P/S below 1 means you're paying less than $1 for every $1 of annual revenue. For a profitable business (net margin above 5%), this is typically very cheap by historical US market standards. The implied earnings yield at P/S 0.8 and a 5% margin is 6.25% — better than most bond yields with equity upside if margins recover or multiple expands.

Low P/S alone can identify companies with very thin margins where low revenue multiples are appropriate — a grocery chain or auto dealer at P/S 0.3 is not actually cheap because their margins are 1–2%. The net margin above 5% filter ensures the company has genuine profitability, making the low P/S a signal of undervaluation rather than a reflection of the business model's structural economics.

P/E is more sensitive to earnings manipulation and cyclical swings. P/S is more stable — revenue fluctuates less than earnings. P/S is especially useful when comparing companies at different earnings cycle stages or when earnings are temporarily depressed by restructuring charges. P/E remains more universally useful for profitable businesses with stable earnings.

Financial services (banks, insurance), retail and consumer staples, basic materials, energy, and traditional industrials. These sectors have high revenues relative to market caps. Technology and healthcare typically have higher P/S ratios because their revenue generates much higher margins. A technology company at P/S 0.8 with 15% margins is extraordinarily cheap; a retailer at P/S 0.5 with 2% margins may be fairly valued.

This screen requires net margin above 5%, so unprofitable companies are excluded. P/S is sometimes used for early-stage growth companies before they reach profitability, but in those cases it's a growth valuation tool, not a value tool. For profitable companies, low P/S combined with improving margins is a classic value signal.

P/S = Current Market Cap / Total Annual Revenue (trailing twelve months). For example, a company with a $400M market cap and $600M annual revenue has a P/S of 0.67. Alternatively, P/S = Current Stock Price / Revenue Per Share (annual revenue divided by total shares outstanding).

The S&P 500 has historically traded at an average P/S of 1.5–2.5×. Individual sector averages vary widely: consumer staples 0.5–1.5×, technology 5–15×, financials 1–3×, energy 0.3–1×. The P/S below 1 threshold in this screen is most meaningful for sectors where it genuinely represents below-average valuation, not sectors where P/S of 0.5 is structurally normal.

Yes. A business with declining revenue, eroding margins, or structural competitive threats may deserve a low P/S permanently. The net margin requirement reduces this risk but doesn't eliminate it. Always check revenue growth trend, margin trajectory, and competitive position for any name on this screen before concluding it's genuinely undervalued.

Daily. Market cap updates with each day's closing price, and revenue figures update whenever new quarterly or annual filings are processed in the StockSifting database. The combination reflects the most current available data for both price and revenue.