WEBULL

Strabag SE's (VIE:STR) Earnings Are Not Doing Enough For Some Investors

Simply Wall St · 1d ago

With a price-to-earnings (or "P/E") ratio of 11.2x Strabag SE (VIE:STR) may be sending bullish signals at the moment, given that almost half of all companies in Austria have P/E ratios greater than 16x and even P/E's higher than 22x are not unusual. 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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Recent times have been pleasing for Strabag as its earnings have risen in spite of the market's earnings going into reverse. It might be that many expect the strong earnings performance to degrade substantially, possibly more than the market, which has repressed the P/E. 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 Strabag

pe-multiple-vs-industry
WBAG:STR Price to Earnings Ratio vs Industry December 16th 2025
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Strabag.

How Is Strabag's Growth Trending?

Strabag'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.

Retrospectively, the last year delivered an exceptional 15% gain to the company's bottom line. Pleasingly, EPS has also lifted 37% in aggregate from three years ago, thanks to the last 12 months of growth. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth.

Shifting to the future, estimates from the two analysts covering the company suggest earnings growth is heading into negative territory, declining 2.8% per annum over the next three years. Meanwhile, the broader market is forecast to expand by 13% each year, which paints a poor picture.

With this information, we are not surprised that Strabag is trading at a P/E lower than the market. 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.

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

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.

We've established that Strabag maintains its low P/E on the weakness of its forecast for sliding earnings, as expected. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.

You need to take note of risks, for example - Strabag has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you're unsure about the strength of Strabag's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.