WEBULL

Jadranski naftovod d.d. (ZGSE:JNAF) Is Going Strong But Fundamentals Appear To Be Mixed : Is There A Clear Direction For The Stock?

Simply Wall St · 4d ago

Jadranski naftovod d.d (ZGSE:JNAF) has had a great run on the share market with its stock up by a significant 6.4% over the last week. However, we decided to pay attention to the company's fundamentals which don't appear to give a clear sign about the company's financial health. Specifically, we decided to study Jadranski naftovod d.d's ROE in this article.

Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Simply put, it is used to assess the profitability of a company in relation to its equity capital.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

How Do You Calculate Return On Equity?

The formula for ROE is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Jadranski naftovod d.d is:

6.1% = €44m ÷ €723m (Based on the trailing twelve months to September 2025).

The 'return' refers to a company's earnings over the last year. So, this means that for every €1 of its shareholder's investments, the company generates a profit of €0.06.

View our latest analysis for Jadranski naftovod d.d

Why Is ROE Important For Earnings Growth?

We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

Jadranski naftovod d.d's Earnings Growth And 6.1% ROE

At first glance, Jadranski naftovod d.d's ROE doesn't look very promising. Next, when compared to the average industry ROE of 11%, the company's ROE leaves us feeling even less enthusiastic. However, the moderate 7.4% net income growth seen by Jadranski naftovod d.d over the past five years is definitely a positive. So, there might be other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place.

Next, on comparing with the industry net income growth, we found that Jadranski naftovod d.d's reported growth was lower than the industry growth of 21% over the last few years, which is not something we like to see.

past-earnings-growth
ZGSE:JNAF Past Earnings Growth January 8th 2026

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Jadranski naftovod d.d is trading on a high P/E or a low P/E, relative to its industry.

Is Jadranski naftovod d.d Making Efficient Use Of Its Profits?

The high three-year median payout ratio of 60% (or a retention ratio of 40%) for Jadranski naftovod d.d suggests that the company's growth wasn't really hampered despite it returning most of its income to its shareholders.

Moreover, Jadranski naftovod d.d is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years.

Summary

Overall, we have mixed feelings about Jadranski naftovod d.d. While the company has posted a decent earnings growth, We do feel that the earnings growth number could have been even higher, had the company been reinvesting more of its earnings at a higher rate of return. So far, we've only made a quick discussion around the company's earnings growth. You can do your own research on Jadranski naftovod d.d and see how it has performed in the past by looking at this FREE detailed graph of past earnings, revenue and cash flows.