Multiply Group PJSC's (ADX:MULTIPLY) Promising Earnings May Rest On Soft Foundations

Despite posting some strong earnings, the market for Multiply Group PJSC's (ADX:MULTIPLY) stock hasn't moved much. We did some digging, and we found some concerning factors in the details.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand Multiply Group PJSC's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from د.إ2.8b worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Multiply Group PJSC had a rather significant contribution from unusual items relative to its profit to March 2025. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Multiply Group PJSC.

Our Take On Multiply Group PJSC's Profit Performance

As we discussed above, we think the significant positive unusual item makes Multiply Group PJSC's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Multiply Group PJSC's underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you want to do dive deeper into Multiply Group PJSC, you'd also look into what risks it is currently facing. For example, Multiply Group PJSC has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

This note has only looked at a single factor that sheds light on the nature of Multiply Group PJSC's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.