• EN

    • -+ 0.00%
    -+ 0.00%
    -+ 0.00%

    BrainsWay Ltd.'s (TLV:BWAY) 27% Share Price Surge Not Quite Adding Up

    Simply Wall St·12/24/2025 04:21:09
    Listen to the news

    BrainsWay Ltd. (TLV:BWAY) shareholders would be excited to see that the share price has had a great month, posting a 27% gain and recovering from prior weakness. Looking back a bit further, it's encouraging to see the stock is up 82% in the last year.

    After such a large jump in price, given close to half the companies in Israel have price-to-earnings ratios (or "P/E's") below 15x, you may consider BrainsWay as a stock to avoid entirely with its 60.6x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.

    This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

    Recent times have been quite advantageous for BrainsWay as its earnings have been rising very briskly. It seems that many are expecting the strong earnings performance to beat most other companies over the coming period, which has increased investors’ willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.

    Check out our latest analysis for BrainsWay

    pe-multiple-vs-industry
    TASE:BWAY Price to Earnings Ratio vs Industry December 24th 2025
    We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on BrainsWay's earnings, revenue and cash flow.

    How Is BrainsWay's Growth Trending?

    BrainsWay's P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the market.

    Taking a look back first, we see that the company grew earnings per share by an impressive 276% last year. However, the latest three year period hasn't been as great in aggregate as it didn't manage to provide any growth at all. So it appears to us that the company has had a mixed result in terms of growing earnings over that time.

    Comparing that to the market, which is predicted to deliver 23% growth in the next 12 months, the company's momentum is weaker based on recent medium-term annualised earnings results.

    In light of this, it's alarming that BrainsWay's P/E sits above the majority of other companies. It seems most investors are ignoring the fairly limited recent growth rates 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 heavily on the share price eventually.

    The Bottom Line On BrainsWay's P/E

    The strong share price surge has got BrainsWay's P/E rushing to great heights as well. Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

    We've established that BrainsWay currently trades on a much higher than expected P/E since its recent three-year growth is lower than the wider market forecast. When we see weak earnings with slower than market growth, we suspect the share price is at risk of declining, sending the high P/E lower. Unless the recent medium-term conditions improve markedly, it's very challenging to accept these prices as being reasonable.

    You should always think about risks. Case in point, we've spotted 1 warning sign for BrainsWay 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.