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If You Had Bought Lifeway Foods (NASDAQ:LWAY) Shares A Year Ago You'd Have Earned163% Returns

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Simply Wall St
·3 min read
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When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. For example, the Lifeway Foods, Inc. (NASDAQ:LWAY) share price has soared 163% in the last year. Most would be very happy with that, especially in just one year! It's up an even more impressive 181% over the last quarter. On the other hand, longer term shareholders have had a tougher run, with the stock falling 27% in three years.

See our latest analysis for Lifeway Foods

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 year Lifeway Foods grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

Revenue was pretty flat year on year, but maybe a closer look at the data can explain the market optimism.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

If you are thinking of buying or selling Lifeway Foods stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Lifeway Foods shareholders have received a total shareholder return of 163% over the last year. Notably the five-year annualised TSR loss of 8.2% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Lifeway Foods (of which 1 is potentially serious!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.