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Little Excitement Around NMDC Energy - P.J.S.C.'s (ADX:NMDCENR) Earnings

Simply Wall St · 20h ago

NMDC Energy - P.J.S.C.'s (ADX:NMDCENR) price-to-earnings (or "P/E") ratio of 8.3x might make it look like a buy right now compared to the market in the United Arab Emirates, where around half of the companies have P/E ratios above 12x and even P/E's above 17x are quite common. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.

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NMDC Energy - P.J.S.C certainly has been doing a good job lately as it's been growing earnings more than most other companies. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward. 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 out of favour.

View our latest analysis for NMDC Energy - P.J.S.C

pe-multiple-vs-industry
ADX:NMDCENR Price to Earnings Ratio vs Industry December 5th 2025
Keen to find out how analysts think NMDC Energy - P.J.S.C's future stacks up against the industry? In that case, our free report is a great place to start.

Is There Any Growth For NMDC Energy - P.J.S.C?

NMDC Energy - P.J.S.C'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 growth, the company posted a terrific increase of 152%. Despite this strong recent growth, it's still struggling to catch up as its three-year EPS frustratingly shrank by 91% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.

Turning to the outlook, the next three years should bring diminished returns, with earnings decreasing 6.1% per annum as estimated by the three analysts watching the company. Meanwhile, the broader market is forecast to expand by 6.4% per annum, which paints a poor picture.

In light of this, it's understandable that NMDC Energy - P.J.S.C's P/E would sit below the majority of other companies. However, shrinking earnings are unlikely to lead to a stable P/E over the longer term. There's potential for the P/E to fall to even lower levels if the company doesn't improve its profitability.

The Key Takeaway

While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.

As we suspected, our examination of NMDC Energy - P.J.S.C's analyst forecasts revealed that its outlook for shrinking earnings is contributing to its low P/E. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances.

The company's balance sheet is another key area for risk analysis. Our free balance sheet analysis for NMDC Energy - P.J.S.C with six simple checks will allow you to discover any risks that could be an issue.

If you're unsure about the strength of NMDC Energy - P.J.S.C's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.