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It is a pleasure to report that the Elevate Credit, Inc. (NYSE:ELVT) is up 80% in the last quarter. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 63%. So the improvement may be a real relief to some. After all, could be that the fall was overdone.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).
Elevate Credit became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.
Revenue is actually up 3.8% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Elevate Credit further; while we may be missing something on this analysis, there might also be an opportunity.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It is of course excellent to see how Elevate Credit has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Elevate Credit stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Elevate Credit shareholders are down 38% for the year, but the broader market is up 23%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 18% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Elevate Credit better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Elevate Credit (including 1 which is is significant) .
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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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