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Able C&C Co., Ltd. (KRX:078520) Stock Rockets 44% As Investors Are Less Pessimistic Than Expected

Simply Wall St · 1d ago

Able C&C Co., Ltd. (KRX:078520) shareholders would be excited to see that the share price has had a great month, posting a 44% gain and recovering from prior weakness. Looking back a bit further, it's encouraging to see the stock is up 77% in the last year.

Since its price has surged higher, given close to half the companies in Korea have price-to-earnings ratios (or "P/E's") below 13x, you may consider Able C&C as a stock to avoid entirely with its 30x P/E ratio. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.

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For example, consider that Able C&C's financial performance has been poor lately as its earnings have been in decline. 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. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

Check out our latest analysis for Able C&C

pe-multiple-vs-industry
KOSE:A078520 Price to Earnings Ratio vs Industry December 16th 2025
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Able C&C will help you shine a light on its historical performance.

How Is Able C&C's Growth Trending?

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

Retrospectively, the last year delivered a frustrating 6.5% decrease to the company's bottom line. Unfortunately, that's brought it right back to where it started three years ago with EPS growth being virtually non-existent overall during that time. 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 38% shows it's noticeably less attractive on an annualised basis.

With this information, we find it concerning that Able C&C is trading at a P/E higher than the market. It seems most investors are ignoring the fairly limited recent growth rates 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.

What We Can Learn From Able C&C's P/E?

Able C&C'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.

We've established that Able C&C currently trades on a much higher than expected P/E since its recent three-year growth is lower than the wider market forecast. Right now we are increasingly uncomfortable with the high P/E as this earnings performance isn't likely to support such positive sentiment for long. Unless the recent medium-term conditions improve markedly, it's very challenging to accept these prices as being reasonable.

You should always think about risks. Case in point, we've spotted 3 warning signs for Able C&C you should be aware of, and 1 of them is a bit concerning.

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