Brookfield Business Partners (NYSE:BBU) stock’s movement over the past month has caught the attention of investors, with shares gaining roughly 26% in the past 3 months despite some recent volatility. Many are weighing the company’s long-term prospects in comparison with shorter-term trends.
See our latest analysis for Brookfield Business Partners.
Brookfield Business Partners has delivered a strong 31% year-to-date share price return. However, recent bouts of volatility brought a sharp pullback this past week. Even with these short-term swings, the company’s one-year total shareholder return of 25% shows momentum is still on its side and suggests confidence in its long-term strategy is building.
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With shares trading around $31, about 22% below the average analyst price target, investors must now decide whether Brookfield Business Partners represents an undervalued opportunity or if the market has already priced in future growth expectations.
Brookfield Business Partners is trading at a price-to-sales ratio of only 0.2x, significantly lower than both its closest peers and broader industry benchmarks. With the share price at $31.04, investors are paying less per dollar of revenue than is typical for this sector.
The price-to-sales (P/S) ratio indicates how much investors are willing to pay for each dollar of a company’s sales. For capital goods and industrial businesses, this metric is valuable because it sidesteps profitability issues and focuses on the company’s core revenues, a fundamental driver in industries with fluctuating earnings or in turnarounds.
This deeply discounted multiple suggests that the market is skeptical about Brookfield Business Partners’ ability to convert sales into sustainable profitability, especially since the company is currently unprofitable. However, it also hints at a potential opportunity if the business can execute a turnaround or improve margin performance.
Compared to the global Industrials average of 0.8x and peer group average of 1.2x, Brookfield Business Partners’ P/S ratio stands out as particularly low. This level marks a material discount, which could narrow if the company demonstrates more consistent results or sector sentiment shifts.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Sales of 0.2x (UNDERVALUED)
However, persistent unprofitability and ongoing market skepticism could continue to weigh on the stock. This may limit its upside even if revenues remain strong.