The Attica Publications (ATH:ATEK) share price has done well in the last month, posting a gain of 33%. But shareholders may not all be feeling jubilant, since the share price is still down 21% in the last year.

All else being equal, a sharp share price increase should make a stock less attractive to potential investors. While the market sentiment towards a stock is very changeable, in the long run, the share price will tend to move in the same direction as earnings per share. So some would prefer to hold off buying when there is a lot of optimism towards a stock. Perhaps the simplest way to get a read on investors' expectations of a business is to look at its Price to Earnings Ratio (PE Ratio). Investors have optimistic expectations of companies with higher P/E ratios, compared to companies with lower P/E ratios.

Check out our latest analysis for Attica Publications

How Does Attica Publications's P/E Ratio Compare To Its Peers?

Attica Publications has a P/E ratio of 18.57. The image below shows that Attica Publications has a P/E ratio that is roughly in line with the media industry average (18.2).

That indicates that the market expects Attica Publications will perform roughly in line with other companies in its industry. So if Attica Publications actually outperforms its peers going forward, that should be a positive for the share price. Checking factors such as director buying and selling. could help you form your own view on if that will happen.

How Growth Rates Impact P/E Ratios

Earnings growth rates have a big influence on P/E ratios. That's because companies that grow earnings per share quickly will rapidly increase the 'E' in the equation. And in that case, the P/E ratio itself will drop rather quickly. Then, a lower P/E should attract more buyers, pushing the share price up.

Attica Publications's earnings per share fell by 50% in the last twelve months. But it has grown its earnings per share by 20% per year over the last three years.

Don't Forget: The P/E Does Not Account For Debt or Bank Deposits

Don't forget that the P/E ratio considers market capitalization. So it won't reflect the advantage of cash, or disadvantage of debt. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.

While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.

How Does Attica Publications's Debt Impact Its P/E Ratio?

Net debt totals a substantial 178% of Attica Publications's market cap. This is a relatively high level of debt, so the stock probably deserves a relatively low P/E ratio. Keep that in mind when comparing it to other companies.