Has Polskie Towarzystwo Wspierania Przedsiebiorczosci S.A.'s (WSE:PTW) Impressive Stock Performance Got Anything to Do With Its Fundamentals?

Polskie Towarzystwo Wspierania Przedsiebiorczosci (WSE:PTW) has had a great run on the share market with its stock up by a significant 10% over the last week. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. Specifically, we decided to study Polskie Towarzystwo Wspierania Przedsiebiorczosci's ROE in this article.

ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Put another way, it reveals the company's success at turning shareholder investments into profits.

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How To Calculate Return On Equity?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Polskie Towarzystwo Wspierania Przedsiebiorczosci is:

54% = zł14m ÷ zł26m (Based on the trailing twelve months to September 2025).

The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each PLN1 of shareholders' capital it has, the company made PLN0.54 in profit.

Check out our latest analysis for Polskie Towarzystwo Wspierania Przedsiebiorczosci

Why Is ROE Important For Earnings Growth?

Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

Polskie Towarzystwo Wspierania Przedsiebiorczosci's Earnings Growth And 54% ROE

First thing first, we like that Polskie Towarzystwo Wspierania Przedsiebiorczosci has an impressive ROE. Second, a comparison with the average ROE reported by the industry of 12% also doesn't go unnoticed by us. This likely paved the way for the modest 17% net income growth seen by Polskie Towarzystwo Wspierania Przedsiebiorczosci over the past five years.

Next, on comparing Polskie Towarzystwo Wspierania Przedsiebiorczosci's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 17% over the last few years.

Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Polskie Towarzystwo Wspierania Przedsiebiorczosci is trading on a high P/E or a low P/E, relative to its industry.

Is Polskie Towarzystwo Wspierania Przedsiebiorczosci Efficiently Re-investing Its Profits?

Polskie Towarzystwo Wspierania Przedsiebiorczosci has a significant three-year median payout ratio of 99%, meaning that it is left with only 1.1% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders.

Moreover, Polskie Towarzystwo Wspierania Przedsiebiorczosci is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years.

Summary

Overall, we feel that Polskie Towarzystwo Wspierania Przedsiebiorczosci certainly does have some positive factors to consider. Especially the growth in earnings which was backed by an impressive ROE. Still, the high ROE could have been even more beneficial to investors had the company been reinvesting more of its profits. As highlighted earlier, the current reinvestment rate appears to be negligible. Until now, we have only just grazed the surface of the company's past performance by looking at the company's fundamentals. To gain further insights into Polskie Towarzystwo Wspierania Przedsiebiorczosci's past profit growth, check out this visualization of past earnings, revenue and cash flows.

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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.