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Abdulaziz and Mansour Ibrahim Albabtin Co.'s (TADAWUL:9549) Business Is Trailing The Market But Its Shares Aren't

Simply Wall St · 01/01 03:04

It's not a stretch to say that Abdulaziz and Mansour Ibrahim Albabtin Co.'s (TADAWUL:9549) price-to-earnings (or "P/E") ratio of 16.1x right now seems quite "middle-of-the-road" compared to the market in Saudi Arabia, where the median P/E ratio is around 17x. Although, it's not wise to simply ignore the P/E without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

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For example, consider that Abdulaziz and Mansour Ibrahim Albabtin's financial performance has been poor lately as its earnings have been in decline. It might be that many expect the company to put the disappointing earnings performance behind them over the coming period, which has kept the P/E from falling. If not, then existing shareholders may be a little nervous about the viability of the share price.

Check out our latest analysis for Abdulaziz and Mansour Ibrahim Albabtin

pe-multiple-vs-industry
SASE:9549 Price to Earnings Ratio vs Industry January 1st 2026
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Abdulaziz and Mansour Ibrahim Albabtin will help you shine a light on its historical performance.

How Is Abdulaziz and Mansour Ibrahim Albabtin's Growth Trending?

In order to justify its P/E ratio, Abdulaziz and Mansour Ibrahim Albabtin would need to produce growth that's similar to the market.

Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 26%. As a result, earnings from three years ago have also fallen 83% overall. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.

In contrast to the company, the rest of the market is expected to grow by 12% over the next year, which really puts the company's recent medium-term earnings decline into perspective.

With this information, we find it concerning that Abdulaziz and Mansour Ibrahim Albabtin is trading at a fairly similar P/E to 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 on the share price eventually.

What We Can Learn From Abdulaziz and Mansour Ibrahim Albabtin's P/E?

It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

Our examination of Abdulaziz and Mansour Ibrahim Albabtin revealed its shrinking earnings over the medium-term aren't impacting its P/E as much as we would have predicted, given the market is set to grow. Right now we are uncomfortable with the P/E as this earnings performance is unlikely to support a more positive sentiment for long. Unless the recent medium-term conditions improve, it's challenging to accept these prices as being reasonable.

Before you take the next step, you should know about the 3 warning signs for Abdulaziz and Mansour Ibrahim Albabtin (1 is a bit unpleasant!) that we have uncovered.

You might be able to find a better investment than Abdulaziz and Mansour Ibrahim Albabtin. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).