In This Article:
Sify Technologies Limited (NASDAQ:SIFY) shareholders will doubtless be very grateful to see the share price up 37% in the last quarter. But that doesn't change the fact that the returns over the last three years have been stomach churning. In that time the share price has melted like a snowball in the desert, down 87%. So it's about time shareholders saw some gains. But the more important question is whether the underlying business can justify a higher price still. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
See our latest analysis for Sify Technologies
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the three years that the share price fell, Sify Technologies' earnings per share (EPS) dropped by 58% each year. This change in EPS is reasonably close to the 49% average annual decrease in the share price. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. In this case, it seems that the EPS is guiding the share price.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into Sify Technologies' key metrics by checking this interactive graph of Sify Technologies's earnings, revenue and cash flow.
A Different Perspective
While the broader market gained around 32% in the last year, Sify Technologies shareholders lost 70%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Sify Technologies better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Sify Technologies (of which 2 shouldn't be ignored!) you should know about.