Jacobson Pharma Corporation Limited (HKG:2633) Stocks Shoot Up 30% But Its P/E Still Looks Reasonable

Simply Wall St · 07/02 22:19

Despite an already strong run, Jacobson Pharma Corporation Limited (HKG:2633) shares have been powering on, with a gain of 30% in the last thirty days. The last month tops off a massive increase of 155% in the last year.

Even after such a large jump in price, it's still not a stretch to say that Jacobson Pharma's price-to-earnings (or "P/E") ratio of 11.1x right now seems quite "middle-of-the-road" compared to the market in Hong Kong, where the median P/E ratio is around 11x. Although, it's not wise to simply ignore the P/E without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

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With earnings growth that's exceedingly strong of late, Jacobson Pharma has been doing very well. It might be that many expect the strong earnings performance to wane, which has kept the P/E from rising. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.

See our latest analysis for Jacobson Pharma

pe-multiple-vs-industry
SEHK:2633 Price to Earnings Ratio vs Industry July 2nd 2025
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 Jacobson Pharma's earnings, revenue and cash flow.

What Are Growth Metrics Telling Us About The P/E?

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

Taking a look back first, we see that the company grew earnings per share by an impressive 56% last year. Pleasingly, EPS has also lifted 63% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the earnings growth recently has been superb for the company.

Comparing that to the market, which is predicted to deliver 19% growth in the next 12 months, the company's momentum is pretty similar based on recent medium-term annualised earnings results.

With this information, we can see why Jacobson Pharma is trading at a fairly similar P/E to the market. It seems most investors are expecting to see average growth rates continue into the future and are only willing to pay a moderate amount for the stock.

What We Can Learn From Jacobson Pharma's P/E?

Jacobson Pharma appears to be back in favour with a solid price jump getting its P/E back in line with most other companies. Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.

As we suspected, our examination of Jacobson Pharma revealed its three-year earnings trends are contributing to its P/E, given they look similar to current market expectations. Right now shareholders are comfortable with the P/E as they are quite confident future earnings won't throw up any surprises. Unless the recent medium-term conditions change, they will continue to support the share price at these levels.

It's always necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Jacobson Pharma, and understanding should be part of your investment process.

It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).