Can You Imagine How Pennant Group's (NASDAQ:PNTG) Shareholders Feel About The 29% Share Price Increase?
It might be of some concern to shareholders to see the The Pennant Group, Inc. (NASDAQ:PNTG) share price down 22% in the last month. Looking on the brighter side, the stock is actually up over twelve months. However, its return of 29% does fall short of the market return of, 37%.
See our latest analysis for Pennant Group
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.
Pennant Group was able to grow EPS by 224% in the last twelve months. This EPS growth is significantly higher than the 29% increase in the share price. Therefore, it seems the market isn't as excited about Pennant Group as it was before. This could be an opportunity. Of course, with a P/E ratio of 67.22, the market remains optimistic.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
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. It might be well worthwhile taking a look at our free report on Pennant Group's earnings, revenue and cash flow.
A Different Perspective
Pennant Group shareholders have gained 29% for the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 37%. We regret to inform any shareholders that the share price dropped another 17% in the last three months. It may simply be that the share price got ahead of itself, and its quite possible it will keep moving in the right direction, especially if the business continues to deliver good financial results. 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. For example, we've discovered 1 warning sign for Pennant Group that you should be aware of before investing here.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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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