Further Upside For ANY Biztonsági Nyomda Nyrt. (BUSE:ANY) Shares Could Introduce Price Risks After 28% Bounce

Despite an already strong run, ANY Biztonsági Nyomda Nyrt. (BUSE:ANY) shares have been powering on, with a gain of 28% in the last thirty days. The last month tops off a massive increase of 101% in the last year.

Even after such a large jump in price, it's still not a stretch to say that ANY Biztonsági Nyomda Nyrt's price-to-earnings (or "P/E") ratio of 11.3x right now seems quite "middle-of-the-road" compared to the market in Hungary, where the median P/E ratio is around 12x. While this might not raise any eyebrows, if the P/E ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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Recent times have been quite advantageous for ANY Biztonsági Nyomda Nyrt 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.

View our latest analysis for ANY Biztonsági Nyomda Nyrt

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 ANY Biztonsági Nyomda Nyrt's earnings, revenue and cash flow.

Is There Some Growth For ANY Biztonsági Nyomda Nyrt?

The only time you'd be comfortable seeing a P/E like ANY Biztonsági Nyomda Nyrt's is when the company's growth is tracking the market closely.

If we review the last year of earnings growth, the company posted a terrific increase of 72%. Pleasingly, EPS has also lifted 134% in aggregate from three years ago, thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing earnings over that time.

Comparing that to the market, which is only predicted to deliver 11% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised earnings results.

In light of this, it's curious that ANY Biztonsági Nyomda Nyrt's P/E sits in line with the majority of other companies. Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.

The Key Takeaway

ANY Biztonsági Nyomda Nyrt appears to be back in favour with a solid price jump getting its P/E back in line with most other companies. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

Our examination of ANY Biztonsági Nyomda Nyrt 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.

Before you take the next step, you should know about the 2 warning signs for ANY Biztonsági Nyomda Nyrt (1 is potentially serious!) that we have uncovered.

If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.

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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.