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Over the last month the Hugo Boss AG (ETR:BOSS) has been much stronger than before, rebounding by 37%. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 35% in one year, under-performing the market.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for Hugo Boss
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Unfortunately Hugo Boss reported an EPS drop of 12% for the last year. The share price decline of 35% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It is of course excellent to see how Hugo Boss has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Hugo Boss stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market gained around 11% in the last year, Hugo Boss shareholders lost 33% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 1.8% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Hugo Boss better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hugo Boss you should know about.
But note: Hugo Boss may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.
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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.