Investors Interested In Vista Energy, S.A.B. de C.V.'s (BMV:VISTAA) Earnings

There wouldn't be many who think Vista Energy, S.A.B. de C.V.'s (BMV:VISTAA) price-to-earnings (or "P/E") ratio of 10.1x is worth a mention when the median P/E in Mexico is similar at about 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.

Vista Energy. de certainly has been doing a good job lately as it's been growing earnings more than most other companies. It might be that many expect the strong earnings performance to wane, which has kept the P/E from rising. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

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If you'd like to see what analysts are forecasting going forward, you should check out our free report on Vista Energy. de.

Does Growth Match The P/E?

There's an inherent assumption that a company should be matching the market for P/E ratios like Vista Energy. de's to be considered reasonable.

If we review the last year of earnings growth, the company posted a terrific increase of 46%. The strong recent performance means it was also able to grow EPS by 37,150% in total over the last three years. So we can start by confirming that the company has done a great job of growing earnings over that time.

Turning to the outlook, the next year should generate growth of 19% as estimated by the nine analysts watching the company. That's shaping up to be similar to the 18% growth forecast for the broader market.

In light of this, it's understandable that Vista Energy. de's P/E sits in line with the majority of other companies. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

What We Can Learn From Vista Energy. de's P/E?

While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.

We've established that Vista Energy. de maintains its moderate P/E off the back of its forecast growth being in line with the wider market, as expected. At this stage investors feel the potential for an improvement or deterioration in earnings isn't great enough to justify a high or low P/E ratio. Unless these conditions change, they will continue to support the share price at these levels.

You should always think about risks. Case in point, we've spotted 3 warning signs for Vista Energy. de you should be aware of, and 2 of them shouldn't be ignored.

If these risks are making you reconsider your opinion on Vista Energy. de, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.