While not a mind-blowing move, it is good to see that the Newmark Group, Inc. (NASDAQ:NMRK) share price has gained 11% in the last three months. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 58% in that time. The share price recovery is not so impressive when you consider the fall. Of course, it could be that the fall was overdone.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.
Unfortunately Newmark Group reported an EPS drop of 38% for the last year. This reduction in EPS is not as bad as the 58% share price fall. So it seems the market was too confident about the business, a year ago. The P/E ratio of 11.72 also points to the negative market sentiment.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on Newmark Group's earnings, revenue and cash flow.
A Different Perspective
While Newmark Group shareholders are down 57% for the year (even including dividends), the market itself is up 18%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 11% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Newmark Group better, we need to consider many other factors. Take risks, for example - Newmark Group has 3 warning signs (and 1 which can't be ignored) we think you should know about.
But note: Newmark Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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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