1-800-FLOWERS.COM (NASDAQ:FLWS) adds US$110m to market cap in the past 7 days, though investors from three years ago are still down 58%
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) shareholders should be happy to see the share price up 29% in the last month. Meanwhile over the last three years the stock has dropped hard. Tragically, the share price declined 58% in that time. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.
While the last three years has been tough for 1-800-FLOWERS.COM shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
See our latest analysis for 1-800-FLOWERS.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 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.
Over the three years that the share price declined, 1-800-FLOWERS.COM's earnings per share (EPS) dropped significantly, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at our free report on 1-800-FLOWERS.COM's earnings, revenue and cash flow.
A Different Perspective
1-800-FLOWERS.COM shareholders are up 8.0% for the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 6% per year, over five years. So this might be a sign the business has turned its fortunes around. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with 1-800-FLOWERS.COM .
1-800-FLOWERS.COM is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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.
