Investing in DLH Holdings (NASDAQ:DLHC) three years ago would have delivered you a 218% gain
It hasn't been the best quarter for DLH Holdings Corp. (NASDAQ:DLHC) shareholders, since the share price has fallen 22% in that time. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. The share price marched upwards over that time, and is now 218% higher than it was. To some, the recent share price pullback wouldn't be surprising after such a good run. Only time will tell if there is still too much optimism currently reflected in the share price.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for DLH Holdings
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 three years of share price growth, DLH Holdings achieved compound earnings per share growth of 56% per year. We note that the 47% yearly (average) share price gain isn't too far from the EPS growth rate. Coincidence? Probably not. This suggests that sentiment and expectations have not changed drastically. Rather, the share price has approximately tracked EPS growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that DLH Holdings has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling DLH Holdings stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While it's never nice to take a loss, DLH Holdings shareholders can take comfort that their trailing twelve month loss of 19% wasn't as bad as the market loss of around 24%. Longer term investors wouldn't be so upset, since they would have made 18%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand DLH Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for DLH Holdings you should be aware of, and 1 of them is a bit unpleasant.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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