BIPROGY Inc. (TSE:8056) Stock Rockets 30% As Investors Are Less Pessimistic Than Expected

Simply Wall St · 5d ago

BIPROGY Inc. (TSE:8056) shareholders would be excited to see that the share price has had a great month, posting a 30% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 41%.

After such a large jump in price, BIPROGY may be sending very bearish signals at the moment with a price-to-earnings (or "P/E") ratio of 19.7x, since almost half of all companies in Japan have P/E ratios under 12x and even P/E's lower than 9x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.

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BIPROGY's earnings growth of late has been pretty similar to most other companies. One possibility is that the P/E is high because investors think this modest earnings performance will accelerate. If not, then existing shareholders may be a little nervous about the viability of the share price.

View our latest analysis for BIPROGY

pe-multiple-vs-industry
TSE:8056 Price to Earnings Ratio vs Industry May 7th 2025
Keen to find out how analysts think BIPROGY's future stacks up against the industry? In that case, our free report is a great place to start.

Does Growth Match The High P/E?

In order to justify its P/E ratio, BIPROGY would need to produce outstanding growth well in excess of the market.

Taking a look back first, we see that the company managed to grow earnings per share by a handy 8.6% last year. This was backed up an excellent period prior to see EPS up by 35% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been superb for the company.

Looking ahead now, EPS is anticipated to climb by 6.0% per year during the coming three years according to the seven analysts following the company. That's shaping up to be materially lower than the 9.8% per year growth forecast for the broader market.

In light of this, it's alarming that BIPROGY's P/E sits above the majority of other companies. Apparently many investors in the company are way more bullish than analysts indicate and aren't willing to let go of their stock at any price. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.

What We Can Learn From BIPROGY's P/E?

Shares in BIPROGY have built up some good momentum lately, which has really inflated its P/E. Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Our examination of BIPROGY's analyst forecasts revealed that its inferior earnings outlook isn't impacting its high P/E anywhere near as much as we would have predicted. Right now we are increasingly uncomfortable with the high P/E as the predicted future earnings aren't likely to support such positive sentiment for long. Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.

You always need to take note of risks, for example - BIPROGY has 1 warning sign we think you should be aware of.

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.