In a sharp market reaction, shares of Cue Health Inc. (NASDAQ:HLTH) tumbled today, marking a steep 28% decline. This drop is part of a more extended downturn, with the stock having lost 92% over the past year. The company's price-to-sales (P/S) ratio now stands at 0.2x, which, while seemingly attractive, signals deeper issues within the company when compared to its peers in the US Medical Equipment industry.
Cue Health has been grappling with falling revenues, which last year saw a significant 62% decline in revenue growth—a stark contrast to its previously impressive three-year growth record. This downturn has led analysts to predict that the company will experience a considerably slower growth trajectory moving forward. Expectations are set for an annual growth rate of 6.4% over the next three years, falling short of the industry standard growth rate of 11%.
Investor sentiment is reflecting these subdued growth prospects, contributing to the lower valuation of Cue Health's stock and a P/S ratio that lags behind industry averages. The market's response suggests that investors are aligning their expectations with analysts' forecasts, anticipating that a recovery in share price may not be on the horizon anytime soon.
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