Echo Global Logistics (NASDAQ:ECHO) Shareholders Booked A 74% Gain In The Last Year
These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. For example, the Echo Global Logistics, Inc. (NASDAQ:ECHO) share price is up 74% in the last year, clearly besting the market return of around 36% (not including dividends). So that should have shareholders smiling. The longer term returns have not been as good, with the stock price only 9.5% higher than it was three years ago.
See our latest analysis for Echo Global Logistics
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.
During the last year Echo Global Logistics grew its earnings per share (EPS) by 10%. This EPS growth is significantly lower than the 74% increase in the share price. This indicates that the market is now more optimistic about the stock. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 48.31.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Echo Global Logistics has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
A Different Perspective
It's good to see that Echo Global Logistics has rewarded shareholders with a total shareholder return of 74% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 2% 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. It's always interesting to track share price performance over the longer term. But to understand Echo Global Logistics better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Echo Global Logistics .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. 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.
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