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The Eagle Bancorp (NASDAQ:EGBN) Share Price Has Gained 34% And Shareholders Are Hoping For More

Simply Wall St

If you buy and hold a stock for many years, you'd hope to be making a profit. Furthermore, you'd generally like to see the share price rise faster than the market Unfortunately for shareholders, while the Eagle Bancorp, Inc. (NASDAQ:EGBN) share price is up 34% in the last five years, that's less than the market return. Zooming in, the stock is actually down 12% in the last year.

View our latest analysis for Eagle Bancorp

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over half a decade, Eagle Bancorp managed to grow its earnings per share at 17% a year. The EPS growth is more impressive than the yearly share price gain of 6.0% over the same period. So one could conclude that the broader market has become more cautious towards the stock. The reasonably low P/E ratio of 10.63 also suggests market apprehension.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

NasdaqCM:EGBN Past and Future Earnings, December 9th 2019

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Eagle Bancorp's earnings, revenue and cash flow.

A Different Perspective

Eagle Bancorp shareholders are down 11% for the year (even including dividends) , but the market itself is up 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 6.2% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before spending more time on Eagle Bancorp it might be wise to click here to see if insiders have been buying or selling shares.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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