---
title: "Largo Inc. (TSE:LGO) Looks Inexpensive After Falling 26% But Perhaps Not Attractive Enough"
description: "Largo Inc. (TSE:LGO) shares have dropped 26% recently, leading to a total decline of 48% over the past year. Despite a low price-to-sales (P/S) ratio of 0.9x, indicating potential value, the company's"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/263859912.md"
published_at: "2025-11-01T15:10:34.000Z"
---

# Largo Inc. (TSE:LGO) Looks Inexpensive After Falling 26% But Perhaps Not Attractive Enough

> Largo Inc. (TSE:LGO) shares have dropped 26% recently, leading to a total decline of 48% over the past year. Despite a low price-to-sales (P/S) ratio of 0.9x, indicating potential value, the company's revenue has decreased by 32% in the last year and 53% over three years. Analysts forecast a modest 30% revenue growth for the coming year, significantly lower than the industry average of 80%. This weak outlook contributes to Largo's low P/S, suggesting limited future growth and potential barriers to share price recovery.

**Largo Inc.** (TSE:LGO) shares have had a horrible month, losing 26% 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 48% share price drop.

Since its price has dipped substantially, Largo's price-to-sales (or "P/S") ratio of 0.9x might make it look like a strong buy right now compared to the wider Metals and Mining industry in Canada, where around half of the companies have P/S ratios above 5.9x and even P/S above 38x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/S.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

View our latest analysis for Largo

### How Has Largo Performed Recently?

While the industry has experienced revenue growth lately, Largo's revenue has gone into reverse gear, which is not great. The P/S ratio is probably low because investors think this poor revenue performance isn't going to get any better. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.

Keen to find out how analysts think Largo's future stacks up against the industry? In that case, our **free** report is a great place to start.

## What Are Revenue Growth Metrics Telling Us About The Low P/S?

There's an inherent assumption that a company should far underperform the industry for P/S ratios like Largo's to be considered reasonable.

In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 32%. This means it has also seen a slide in revenue over the longer-term as revenue is down 53% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.

Looking ahead now, revenue is anticipated to climb by 30% during the coming year according to the only analyst following the company. That's shaping up to be materially lower than the 80% growth forecast for the broader industry.

With this information, we can see why Largo is trading at a P/S lower than the industry. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.

## What Does Largo's P/S Mean For Investors?

Largo's P/S looks about as weak as its stock price lately. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

As we suspected, our examination of Largo's analyst forecasts revealed that its inferior revenue outlook is contributing to its low P/S. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.

We don't want to rain on the parade too much, but we did also find **4 warning signs for Largo** (1 can't be ignored!) that you need to be mindful of.

Of course, **profitable companies with a history of great earnings growth are generally safer bets**. So you may wish to see this **free** collection of other companies that have reasonable P/E ratios and have grown earnings strongly.

### Related Stocks

- [LGO.US - Largo Resources](https://longbridge.com/en/quote/LGO.US.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| Does YMIRLINK,Inc. (TSE:4372) Create Value For Shareholders? | The article analyzes YMIRLINK, Inc. (TSE:4372) using Return On Equity (ROE) to assess its value for shareholders. YMIRLI | [Link](https://longbridge.com/en/news/275955569.md) |
| Assessing Ono Pharmaceutical (TSE:4528) Valuation After Improved Nine Month Earnings | Ono Pharmaceutical (TSE:4528) reported strong nine-month earnings with sales of ¥397,036 million and net income of ¥68,9 | [Link](https://longbridge.com/en/news/275987048.md) |
| David Einhorn says the Fed will cut 'substantially more' than two times. So he's betting big on gold | David Einhorn of Greenlight Capital predicts that the Federal Reserve will implement more than two interest rate cuts th | [Link](https://longbridge.com/en/news/275641734.md) |
| Towa Pharmaceutical (TSE:4553) Margin Firmness Reinforces Defensive Earnings Narrative In Q3 2026 | Towa Pharmaceutical (TSE:4553) reported solid Q3 2026 results with revenue of ¥73.6b and net income of ¥8.9b, reflecting | [Link](https://longbridge.com/en/news/275991027.md) |
| CI Canadian Convertible Bond ETF Common (TSE:CXF)  Shares Down 0.7%   - Here's Why | CI Canadian Convertible Bond ETF Common (TSE:CXF) shares fell 0.7% to C$10.71, with trading volume down 37% from average | [Link](https://longbridge.com/en/news/275732895.md) |

---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
