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For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies are hard to find, but they can generate massive returns over long periods. To wit, the YOC AG (ETR:YOC) share price has soared 359% over five years. This just goes to show the value creation that some businesses can achieve. It's also good to see the share price up 39% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for YOC
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the five years of share price growth, YOC moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the YOC share price has gained 120% in three years. Meanwhile, EPS is up 54% per year. This EPS growth is higher than the 30% average annual increase in the share price over the same three years. So you might conclude the market is a little more cautious about the stock, these days.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how YOC has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling YOC stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that YOC shareholders have received a total shareholder return of 67% over the last year. That's better than the annualised return of 36% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand YOC better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with YOC (including 1 which makes us a bit uncomfortable) .