While not a mind-blowing move, it is good to see that the lastminute.com N.V. (VTX:LMN) share price has gained 13% in the last three months. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 57% in the last three years. So it is really good to see an improvement. After all, could be that the fall was overdone.
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.
View our latest analysis for lastminute.com
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During five years of share price growth, lastminute.com moved from a loss to profitability. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.
We think that the revenue decline over three years, at a rate of 30% per year, probably had some shareholders looking to sell. After all, if revenue keeps shrinking, it may be difficult to find earnings growth in the future.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on lastminute.com's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We regret to report that lastminute.com shareholders are down 48% for the year. Unfortunately, that's worse than the broader market decline of 17%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand lastminute.com better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with lastminute.com .
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