While it may not be enough for some shareholders, we think it is good to see the Global Education Limited (NSE:GLOBAL) share price up 18% in a single quarter. But that doesn't change the reality of under-performance over the last twelve months. In fact the stock is down 15% in the last year, well below the market return.
View our latest analysis for Global Education
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Unhappily, Global Education had to report a 4.8% decline in EPS over the last year. The share price decline of 15% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago. The less favorable sentiment is reflected in its current P/E ratio of 3.77.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into Global Education's key metrics by checking this interactive graph of Global Education's earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Global Education's TSR for the last year was -12%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Given that the market gained 9.7% in the last year, Global Education shareholders might be miffed that they lost 12% (even including dividends) . However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 18%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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