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Benign Growth For Asia Pacific Wire & Cable Corporation Limited (NASDAQ:APWC) Underpins Its Share Price

Simply Wall St · 07/24 10:29

When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 20x, you may consider Asia Pacific Wire & Cable Corporation Limited (NASDAQ:APWC) as an attractive investment with its 10.9x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/E.

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For example, consider that Asia Pacific Wire & Cable's financial performance has been poor lately as its earnings have been in decline. One possibility is that the P/E is low because investors think the company won't do enough to avoid underperforming the broader market in the near future. However, if this doesn't eventuate then existing shareholders may be feeling optimistic about the future direction of the share price.

See our latest analysis for Asia Pacific Wire & Cable

pe-multiple-vs-industry
NasdaqCM:APWC Price to Earnings Ratio vs Industry July 24th 2025
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Asia Pacific Wire & Cable will help you shine a light on its historical performance.

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

Asia Pacific Wire & Cable'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.

If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 9.9%. This has erased any of its gains during the last three years, with practically no change in EPS being achieved in total. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.

Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 13% shows it's noticeably less attractive on an annualised basis.

With this information, we can see why Asia Pacific Wire & Cable is trading at a P/E lower than the market. It seems most investors are expecting to see the recent limited growth rates continue into the future and are only willing to pay a reduced amount for the stock.

What We Can Learn From Asia Pacific Wire & Cable's 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.

As we suspected, our examination of Asia Pacific Wire & Cable revealed its three-year earnings trends are contributing to its low P/E, given they look worse than current market expectations. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. If recent medium-term earnings trends continue, it's hard to see the share price rising strongly in the near future under these circumstances.

Having said that, be aware Asia Pacific Wire & Cable is showing 1 warning sign in our investment analysis, you should know about.

If these risks are making you reconsider your opinion on Asia Pacific Wire & Cable, explore our interactive list of high quality stocks to get an idea of what else is out there.