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    Ratio Energies Limited Partnership (TASE:RATI) Reports Stronger Q2 Earnings, Is It Still Overvalued?

    Simply Wall St·09/05/2026 21:18:59
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    Why Ratio Energies - Limited Partnership stock is in focus now

    Ratio Energies - Limited Partnership (TASE:RATI) has attracted fresh attention after reporting second quarter 2026 earnings along with a new cash dividend announcement. This provides investors with updated information on both profitability and income potential.

    The earnings release and fresh dividend come after a period of mixed share price momentum for Ratio Energies, Limited Partnership. The stock has gained 12.9% on a 30 day share price return and 9.1% on a 90 day share price return, while the year to date share price return has declined 6.8%. Over a longer horizon, total shareholder return has been positive, with a 12.3% one year total shareholder return and very large gains of 82.4% and over 7x on a three and five year total shareholder return, which suggests the latest quarterly results and income update are being weighed against an already strong longer term outcome.

    Compare Ratio Energies - Limited Partnership's latest move with a hand picked group of income focused stocks in the 419 dividend fortresses to see how its new payout stacks up.

    After Ratio Energies - Limited Partnership’s strong second quarter and fresh dividend, attention turns to price. Is the current discount to intrinsic value a genuine opportunity, or is the market fairly cautious for a reason?

    Preferred P/E of 13.8x for Ratio Energies: Is it justified?

    For Ratio Energies Limited Partnership, the key valuation signal today is the P/E of 13.8x against a last close of ₪4.73. That level makes the stock look more expensive than several reference points and raises the question of whether investors are paying up for its earnings profile.

    The P/E ratio compares the share price with earnings per share. It is a common yardstick for oil and gas producers because it links directly to current profitability rather than just reported revenue. A higher P/E usually means the market is willing to pay more for every unit of earnings, which can reflect either confidence in the durability of profits or simple overpayment.

    Ratio Energies trades on a P/E of 13.8x, which is lower than the broader IL market P/E of 15.4x according to the data provided. However, the same 13.8x is higher than the Asian Oil and Gas industry average of 12.1x and also above the peer group average of 12.8x. That combination suggests investors are not applying a blanket discount to the stock, even though the company reported a decline of 2.6% in earnings over the past year and there is no forward growth guidance available in the analyst data.

    The comparison with industry and peers is important because it shows where the premium or discount really sits. Against other oil and gas companies, Ratio Energies is priced at a higher multiple of earnings, even with recent earnings contracting and no published forecasts to explain the premium. Against the domestic market, the stock is cheaper on P/E, yet its one year return has lagged both the IL market and the IL Oil and Gas industry. That mix of signals leaves the P/E looking relatively full rather than clearly cheap.

    See what the numbers say about this price — find out in our valuation breakdown.

    Result: Price-to-Earnings of 13.8x (OVERVALUED)

    However, Ratio Energies investors still need to watch for earnings pressure given the recent 2.6% decline and any shift in regional gas demand that could affect exports.

    Find out about the key risks to this Ratio Energies - Limited Partnership narrative.

    Another view on Ratio Energies valuation

    The SWS DCF model suggests a very different picture for Ratio Energies. At a share price of ₪4.73, the stock is trading above an estimated future cash flow value of ₪1.28. That points to an overvalued result using this method and puts more weight on execution risk for holders.

    For investors, the contrast between a relatively full P/E and an even richer reading on our DCF model raises a simple question: Is the market paying for cash flows that may be hard to realise, or is the model too conservative for a gas focused partnership like Ratio Energies?

    Look into how the SWS DCF model arrives at its fair value.

    RATI Discounted Cash Flow as at Sep 2026
    RATI Discounted Cash Flow as at Sep 2026

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Ratio Energies - Limited Partnership for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 257 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Next Steps

    If this mix of signals on Ratio Energies leaves you unsure, consider taking action while sentiment is still forming and review the full picture yourself with the 1 key reward and 2 important warning signs.

    Looking for more investment ideas beyond Ratio Energies?

    Do not stop with Ratio Energies. Use this moment to refresh your watchlist and uncover other stocks that might fit your goals just as well or better.

    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.