WEBULL

Groupe JAJ's (EPA:GJAJ) Shares Climb 27% But Its Business Is Yet to Catch Up

Simply Wall St · 2d ago

Groupe JAJ (EPA:GJAJ) shareholders have had their patience rewarded with a 27% share price jump in the last month. The annual gain comes to 150% following the latest surge, making investors sit up and take notice.

After such a large jump in price, Groupe JAJ may be sending very bearish signals at the moment with a price-to-earnings (or "P/E") ratio of 25.9x, since almost half of all companies in France have P/E ratios under 15x 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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As an illustration, earnings have deteriorated at Groupe JAJ over the last year, which is not ideal at all. It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/E from collapsing. If not, then existing shareholders may be quite nervous about the viability of the share price.

View our latest analysis for Groupe JAJ

pe-multiple-vs-industry
ENXTPA:GJAJ Price to Earnings Ratio vs Industry December 3rd 2025
Although there are no analyst estimates available for Groupe JAJ, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

How Is Groupe JAJ's Growth Trending?

The only time you'd be truly comfortable seeing a P/E as steep as Groupe JAJ's is when the company's growth is on track to outshine the market decidedly.

Retrospectively, the last year delivered a frustrating 40% decrease to the company's bottom line. As a result, earnings from three years ago have also fallen 15% overall. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.

Comparing that to the market, which is predicted to deliver 22% growth in the next 12 months, the company's downward momentum based on recent medium-term earnings results is a sobering picture.

With this information, we find it concerning that Groupe JAJ is trading at a P/E higher than the market. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. Only the boldest would assume these prices are sustainable as a continuation of recent earnings trends is likely to weigh heavily on the share price eventually.

The Bottom Line On Groupe JAJ's P/E

Groupe JAJ's P/E is flying high just like its stock has during the last month. 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.

Our examination of Groupe JAJ revealed its shrinking earnings over the medium-term aren't impacting its high P/E anywhere near as much as we would have predicted, given the market is set to grow. When we see earnings heading backwards and underperforming the market forecasts, we suspect the share price is at risk of declining, sending the high P/E lower. If recent medium-term earnings trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.

It is also worth noting that we have found 5 warning signs for Groupe JAJ (3 don't sit too well with us!) that you need to take into consideration.

Of course, you might also be able to find a better stock than Groupe JAJ. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.