The Green Dot (NYSE:GDOT) Share Price Is Up 175% And Shareholders Are Boasting About It
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It hasn't been the best quarter for Green Dot Corporation (NYSE:GDOT) shareholders, since the share price has fallen 21% in that time. But that scarcely detracts from the really solid long term returns generated by the company over five years. We think most investors would be happy with the 175% return, over that period. To some, the recent pullback wouldn't be surprising after such a fast rise. Only time will tell if there is still too much optimism currently reflected in the share price.
Check out our latest analysis for Green Dot
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over half a decade, Green Dot managed to grow its earnings per share at 23% a year. This EPS growth is remarkably close to the 22% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Green Dot has grown profits over the years, but the future is more important for shareholders. This free interactive report on Green Dot's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Investors in Green Dot had a tough year, with a total loss of 35%, against a market gain of about 8.5%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 22% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before spending more time on Green Dot 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.
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.
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. Thank you for reading.
