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Is Dottikon Es Holding's (VTX:DESN) Share Price Gain Of 194% Well Earned?

Simply Wall St

The Dottikon Es Holding AG (VTX:DESN) share price has had a bad week, falling 10%. But that doesn't change the fact that shareholders have received really good returns over the last five years. In fact, the share price is 194% higher today. To some, the recent pullback wouldn't be surprising after such a fast rise. Ultimately business performance will determine whether the stock price continues the positive long term trend.

Check out our latest analysis for Dottikon Es Holding

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

During the last half decade, Dottikon Es Holding became profitable. 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. In fact, the Dottikon Es Holding stock price is 3.8% lower in the last three years. Meanwhile, EPS is up 9.1% per year. So there seems to be a mismatch between the positive EPS growth and the change in the share price, which is down -1.3% per year.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

SWX:DESN Past and Future Earnings, February 27th 2020

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Dottikon Es Holding's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Dottikon Es Holding has rewarded shareholders with a total shareholder return of 29% in the last twelve months. That's better than the annualised return of 24% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before forming an opinion on Dottikon Es Holding you might want to consider these 3 valuation metrics.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CH exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.