Les Docks des Pétroles d'Ambès -SA (EPA:DPAM) Stock Rockets 27% But Many Are Still Ignoring The Company

Despite an already strong run, Les Docks des Pétroles d'Ambès -SA (EPA:DPAM) shares have been powering on, with a gain of 27% in the last thirty days. The last 30 days bring the annual gain to a very sharp 70%.

Even after such a large jump in price, you could still be forgiven for feeling indifferent about Les Docks des Pétroles d'Ambès -SA's P/E ratio of 14.5x, since the median price-to-earnings (or "P/E") ratio in France is also close to 16x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.

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Recent times have been quite advantageous for Les Docks des Pétroles d'Ambès -SA as its earnings have been rising very briskly. The P/E is probably moderate because investors think this strong earnings growth might not be enough to outperform the broader market in the near future. If that doesn't eventuate, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

See our latest analysis for Les Docks des Pétroles d'Ambès -SA

We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Les Docks des Pétroles d'Ambès -SA's earnings, revenue and cash flow.

How Is Les Docks des Pétroles d'Ambès -SA's Growth Trending?

Les Docks des Pétroles d'Ambès -SA's P/E ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the market.

Taking a look back first, we see that the company grew earnings per share by an impressive 43% last year. The strong recent performance means it was also able to grow EPS by 70% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been superb for the company.

Comparing that to the market, which is only predicted to deliver 16% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised earnings results.

With this information, we find it interesting that Les Docks des Pétroles d'Ambès -SA is trading at a fairly similar P/E to the market. It may be that most investors are not convinced the company can maintain its recent growth rates.

The Bottom Line On Les Docks des Pétroles d'Ambès -SA's P/E

Les Docks des Pétroles d'Ambès -SA appears to be back in favour with a solid price jump getting its P/E back in line with most other companies. Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.

Our examination of Les Docks des Pétroles d'Ambès -SA revealed its three-year earnings trends aren't contributing to its P/E as much as we would have predicted, given they look better than current market expectations. There could be some unobserved threats to earnings preventing the P/E ratio from matching this positive performance. At least the risk of a price drop looks to be subdued if recent medium-term earnings trends continue, but investors seem to think future earnings could see some volatility.

Plus, you should also learn about this 1 warning sign we've spotted with Les Docks des Pétroles d'Ambès -SA.

Of course, you might also be able to find a better stock than Les Docks des Pétroles d'Ambès -SA. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.

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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.