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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For example, the Trip.com Group Limited (NASDAQ:TCOM) share price has soared 156% in the last three years. How nice for those who held the stock! On top of that, the share price is up 37% in about a quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Trip.com Group
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Trip.com Group was able to grow its EPS at 131% per year over three years, sending the share price higher. This EPS growth is higher than the 37% average annual increase in the share price. So one could reasonably conclude that the market has cooled on the stock.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Trip.com Group has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Trip.com Group's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Trip.com Group shareholders have received a total shareholder return of 89% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 14% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Is Trip.com Group cheap compared to other companies? These 3 valuation measures might help you decide.
If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.