flatexDEGIRO AG (ETR:FTK) Shares Soar 25%, But Many Still Ignore the Company

The flatexDEGIRO AG (ETR:FTK) The share price has performed very well over the past month, with an excellent gain of 25%. The last 30 days bring annual gains to a very sharp 33%.

Even though the price has moved up, flatexDEGIRO can still send bullish signals at the moment with a price-to-earnings ratio (or “P/E”) of 14.7x, as almost half of all companies in Germany have a price-to-earnings ratio. greater than 18x and even price-to-earnings ratios greater than 32x are not uncommon. However, the price-to-earnings ratio may be low for a reason and further research is needed to determine if this is justified.

With earnings growth superior to most other companies lately, flatexDEGIRO is doing relatively well. It may be that many expect the strong earnings figures to deteriorate materially, which has weighed on the price/earnings ratio. If you like the company, you hope you don’t, so you can potentially pick up some shares while it’s out of favor.

Check out our latest analysis for flatexDEGIRO

Want to get the full picture of analyst estimates for the company? Then our free report on flatexDEGIRO helps you discover what’s on the horizon.

What is the growth trend of flatexDEGIRO?

There is an inherent assumption that a company must underperform the market for price-to-earnings ratios like flatexDEGIRO’s to be considered reasonable.

Looking back first, we see that the company managed to grow earnings per share by a handy 5.2% last year. This was supported by an excellent period before earnings per share rose a total of 62% over the past three years. Therefore, it’s fair to say that earnings growth has been excellent for the company recently.

Looking ahead now, earnings per share are expected to grow 12% annually over the next three years, according to the 10 analysts covering the company. That appears to be similar to the 13% annual growth forecast for the broader market.

With this information, we find it strange that flatexDEGIRO is trading at a price/earnings ratio that is lower than the market. Most investors may not be convinced that the company can deliver on future growth expectations.

The most important takeaway

Shares of flatexDEGIRO may have received a strong boost, but the price-earnings ratio has certainly not yet reached great heights. It’s not wise to use the price-to-earnings ratio alone to determine whether you should sell your shares, but it can provide a practical guide to the company’s future prospects.

Our review of flatexDEGIRO’s analyst forecasts showed that its earnings outlook, in line with the market, is not contributing as much to the price-to-earnings ratio as we expected. There could be some unnoticed threats to earnings that are causing the price-to-earnings ratio to fall out of line with prospects. It appears that some are indeed anticipating earnings instability, as these conditions should normally provide more support to the stock price.

Moreover, you should learn more about this as well 1 warning sign we’ve spotted with flatexDEGIRO.

If this risks will make you reconsider your opinion about flatexDEGIROexplore our interactive list of high-quality stocks to get an idea of ​​what else is out there.

Do you have feedback on this article? Worried about the content? Please contact us directly from us. You can also email the editorial team (at) Simplywallst.com.

This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.