Babylon Pump & Power Limited's (ASX:BPP) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?

Simply Wall St.

Feb 05

It is hard to get excited after looking at Babylon Pump & Power's (ASX:BPP) recent performance, when its stock has declined 27% over the past three months. But if you pay close attention, you might ...

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But if you pay close attention, you might ...</p>\n\n<a href=\"https://simplywall.st/stocks/au/capital-goods/asx-bpp/babylon-pump-power-shares/news/babylon-pump-power-limiteds-asxbpp-stock-has-shown-weakness-1\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Babylon Pump & Power Limited's (ASX:BPP) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBabylon Pump & Power Limited's (ASX:BPP) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-05 04:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/au/capital-goods/asx-bpp/babylon-pump-power-shares/news/babylon-pump-power-limiteds-asxbpp-stock-has-shown-weakness-1><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>It is hard to get excited after looking at Babylon Pump & Power's (ASX:BPP) recent performance, when its stock has declined 27% over the past three months.   But if you pay close attention, you might ...</p>\n\n<a href=\"https://simplywall.st/stocks/au/capital-goods/asx-bpp/babylon-pump-power-shares/news/babylon-pump-power-limiteds-asxbpp-stock-has-shown-weakness-1\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BPP.AU","symbol_name":"BABYLON PUMP & POWER LTD","start_time":0,"source_url":"https://simplywall.st/stocks/au/capital-goods/asx-bpp/babylon-pump-power-shares/news/babylon-pump-power-limiteds-asxbpp-stock-has-shown-weakness-1","article_id":"2609199643","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/3081000-choice1-main-header/1585186648416"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/au/capital-goods/asx-bpp/babylon-pump-power-shares/news/babylon-pump-power-limiteds-asxbpp-stock-has-shown-weakness-1","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2609199643","pubTimestamp":1770235283,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"It is hard to get excited after looking at Babylon Pump & Power's (ASX:BPP) recent performance, when its stock has...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BPP.AU":"BABYLON PUMP & POWER LTD","BK7031":"贸易公司与经销商"},"translate_title":"Babylon Pump&Power Limited(ASX：BPP)的股票最近表现疲软，但财务前景看起来不错：市场错了吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BPP.AU":1.5},"content_text":"It is hard to get excited after looking at Babylon Pump & Power's (ASX:BPP) recent performance, when its stock has declined 27% over the past three months.   But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals.     Specifically, we decided to study Babylon Pump & Power's  ROE in this article.    Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital.  In simpler terms, it measures the profitability of a company in relation to shareholder's equity. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.Advertisement How Do You Calculate Return On Equity?  ROE can be calculated by using the formula:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Babylon Pump & Power is:5.2% = AU$787k ÷ AU$15m (Based on the trailing twelve months to June 2025). The 'return' is the profit over the last twelve months.  Another way to think of that is that for every A$1 worth of equity, the company was able to earn A$0.05 in profit.  Check out our latest analysis for Babylon Pump & Power   What Has ROE Got To Do With Earnings Growth?  We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings.  Based on how much of its profits the company chooses to reinvest or \"retain\", we are then able to evaluate a company's future ability to generate profits.  Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.  Babylon Pump & Power's Earnings Growth And 5.2% ROE  It is quite clear that Babylon Pump & Power's ROE is rather low.   Even when compared to the industry average of 11%, the ROE figure is pretty disappointing.   However, we we're pleasantly surprised to see that Babylon Pump & Power grew its net income at a significant rate of 46% in the last five years.  We reckon that there could be other factors at play here.  Such as - high earnings retention or an efficient management in place.     We then compared Babylon Pump & Power's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 32% in the same 5-year period.   ASX:BPP Past Earnings Growth February 4th 2026 Earnings growth is an important metric to consider when valuing a stock.   It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).   This then helps them determine if the stock is placed for a bright or bleak future.    Is Babylon Pump & Power fairly valued compared to other companies? These 3 valuation measures might help you decide.    Is Babylon Pump & Power Using Its Retained Earnings Effectively?    Given that Babylon Pump & Power doesn't pay any regular dividends to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business.     Conclusion    Overall, we feel that Babylon Pump & Power certainly does have some positive factors to consider.      Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth.       While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company.   To know the 4 risks we have identified for Babylon Pump & Power visit our risks dashboard for free. Valuation is complex, but we're here to simplify it.Discover if Babylon Pump &amp; Power might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}