Inta Bina Group Berhad's (KLSE:INTA) Shares Leap 26% Yet They're Still Not Telling The Full Story

The Inta Bina Group Berhad (KLSE:INTA) share price has done very well over the last month, posting an excellent gain of 26%. The last 30 days bring the annual gain to a very sharp 57%.

Although its price has surged higher, Inta Bina Group Berhad's price-to-earnings (or "P/E") ratio of 8.5x might still make it look like a buy right now compared to the market in Malaysia, where around half of the companies have P/E ratios above 17x and even P/E's above 30x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/E.

Inta Bina Group Berhad certainly has been doing a good job lately as it's been growing earnings more than most other companies. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.

See our latest analysis for Inta Bina Group Berhad

Keen to find out how analysts think Inta Bina Group Berhad's future stacks up against the industry? In that case, our free report is a great place to start.

Is There Any Growth For Inta Bina Group Berhad?

Inta Bina Group Berhad's P/E ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the market.

Retrospectively, the last year delivered an exceptional 139% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 180% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been superb for the company.

Turning to the outlook, the next three years should generate growth of 11% per year as estimated by the two analysts watching the company. That's shaping up to be similar to the 12% each year growth forecast for the broader market.

With this information, we find it odd that Inta Bina Group Berhad is trading at a P/E lower than the market. It may be that most investors are not convinced the company can achieve future growth expectations.

What We Can Learn From Inta Bina Group Berhad's P/E?

The latest share price surge wasn't enough to lift Inta Bina Group Berhad's P/E close to the market median. Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

Our examination of Inta Bina Group Berhad's analyst forecasts revealed that its market-matching earnings outlook isn't contributing to its P/E as much as we would have predicted. When we see an average earnings outlook with market-like growth, we assume potential risks are what might be placing pressure on the P/E ratio. It appears some are indeed anticipating earnings instability, because these conditions should normally provide more support to the share price.

It is also worth noting that we have found 2 warning signs for Inta Bina Group Berhad that you need to take into consideration.

If you're unsure about the strength of Inta Bina Group Berhad's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.