WEBULL

S.C. Caromet S.A.'s (BVB:ARMT) Share Price Boosted 28% But Its Business Prospects Need A Lift Too

Simply Wall St · 3d ago

Those holding S.C. Caromet S.A. (BVB:ARMT) shares would be relieved that the share price has rebounded 28% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 24% over that time.

Although its price has surged higher, S.C. Caromet may still be sending bullish signals at the moment with its price-to-earnings (or "P/E") ratio of 8.4x, since almost half of all companies in Romania have P/E ratios greater than 15x and even P/E's higher than 35x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Recent times have been quite advantageous for S.C. Caromet as its earnings have been rising very briskly. One possibility is that the P/E is low because investors think this strong earnings growth might actually underperform the broader market in the near future. If that doesn't eventuate, then existing shareholders have reason to be quite optimistic about the future direction of the share price.

View our latest analysis for S.C. Caromet

pe-multiple-vs-industry
BVB:ARMT Price to Earnings Ratio vs Industry January 6th 2026
Although there are no analyst estimates available for S.C. Caromet, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

Does Growth Match The Low P/E?

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

Retrospectively, the last year delivered an exceptional 58% gain to the company's bottom line. However, this wasn't enough as the latest three year period has seen a very unpleasant 1.9% drop in EPS in aggregate. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.

Weighing that medium-term earnings trajectory against the broader market's one-year forecast for expansion of 11% shows it's an unpleasant look.

With this information, we are not surprised that S.C. Caromet is trading at a P/E lower than the market. Nonetheless, there's no guarantee the P/E has reached a floor yet with earnings going in reverse. 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 S.C. Caromet's P/E?

Despite S.C. Caromet's shares building up a head of steam, its P/E still lags most other companies. 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 S.C. Caromet maintains its low P/E on the weakness of its sliding earnings over the medium-term, 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. If recent medium-term earnings trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.

You should always think about risks. Case in point, we've spotted 2 warning signs for S.C. Caromet you should be aware 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.