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Industrial Holding Bulgaria AD's (BUL:IHB) 49% Dip Still Leaving Some Shareholders Feeling Restless Over Its P/ERatio

Simply Wall St · 4d ago

Industrial Holding Bulgaria AD (BUL:IHB) shareholders that were waiting for something to happen have been dealt a blow with a 49% share price drop in the last month. For any long-term shareholders, the last month ends a year to forget by locking in a 54% share price decline.

In spite of the heavy fall in price, there still wouldn't be many who think Industrial Holding Bulgaria AD's price-to-earnings (or "P/E") ratio of 12.9x is worth a mention when the median P/E in Bulgaria is similar at about 11x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.

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As an illustration, earnings have deteriorated at Industrial Holding Bulgaria AD over the last year, which is not ideal at all. One possibility is that the P/E is moderate because investors think the company might still do enough to be in line with the broader market in the near future. If not, then existing shareholders may be a little nervous about the viability of the share price.

See our latest analysis for Industrial Holding Bulgaria AD

pe-multiple-vs-industry
BUL:IHB Price to Earnings Ratio vs Industry January 2nd 2026
Although there are no analyst estimates available for Industrial Holding Bulgaria AD, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

Is There Some Growth For Industrial Holding Bulgaria AD?

There's an inherent assumption that a company should be matching the market for P/E ratios like Industrial Holding Bulgaria AD's to be considered reasonable.

If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 38%. The last three years don't look nice either as the company has shrunk EPS by 87% in aggregate. 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 21% over the next year, which really puts the company's recent medium-term earnings decline into perspective.

In light of this, it's somewhat alarming that Industrial Holding Bulgaria AD's P/E sits in line with the majority of other companies. Apparently many investors in the company are way less bearish than recent times would indicate and aren't willing to let go of their stock right now. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the recent negative growth rates.

The Bottom Line On Industrial Holding Bulgaria AD's P/E

Industrial Holding Bulgaria AD's plummeting stock price has brought its P/E right back to the rest of the market. 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.

We've established that Industrial Holding Bulgaria AD currently trades on a higher than expected P/E since its recent earnings have been in decline over the medium-term. When we see earnings heading backwards and underperforming the market forecasts, we suspect the share price is at risk of declining, sending the moderate P/E lower. Unless the recent medium-term conditions improve, it's challenging to accept these prices as being reasonable.

There are also other vital risk factors to consider and we've discovered 2 warning signs for Industrial Holding Bulgaria AD (1 is a bit concerning!) that you should be aware of before investing here.

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.