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NOS, S.G.P.S., S.A.'s (ELI:NOS) Low P/E No Reason For Excitement

Simply Wall St · 2d ago

When close to half the companies in Portugal have price-to-earnings ratios (or "P/E's") above 14x, you may consider NOS, S.G.P.S., S.A. (ELI:NOS) as an attractive investment with its 8.1x P/E ratio. 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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NOS S.G.P.S' negative earnings growth of late has neither been better nor worse than most other companies. It might be that many expect the company's earnings performance to degrade further, which has repressed the P/E. You'd much rather the company wasn't bleeding earnings if you still believe in the business. In saying that, existing shareholders may feel hopeful about the share price if the company's earnings continue tracking the market.

See our latest analysis for NOS S.G.P.S

pe-multiple-vs-industry
ENXTLS:NOS Price to Earnings Ratio vs Industry December 24th 2025
Want the full picture on analyst estimates for the company? Then our free report on NOS S.G.P.S will help you uncover what's on the horizon.

Is There Any Growth For NOS S.G.P.S?

There's an inherent assumption that a company should underperform the market for P/E ratios like NOS S.G.P.S' to be considered reasonable.

If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 1.3%. Regardless, EPS has managed to lift by a handy 18% in aggregate from three years ago, thanks to the earlier period of growth. Although it's been a bumpy ride, it's still fair to say the earnings growth recently has been mostly respectable for the company.

Looking ahead now, EPS is anticipated to slump, contracting by 8.8% per annum during the coming three years according to the eight analysts following the company. Meanwhile, the broader market is forecast to expand by 11% per annum, which paints a poor picture.

With this information, we are not surprised that NOS S.G.P.S 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. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.

The Final Word

Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

We've established that NOS S.G.P.S 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.

We don't want to rain on the parade too much, but we did also find 3 warning signs for NOS S.G.P.S (1 can't be ignored!) that you need to be mindful of.

Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.