The Ocado Group (LON:OCDO) Share Price Is Up 671% And Shareholders Are Delighted
Ocado Group plc (LON:OCDO) shareholders might be concerned after seeing the share price drop 10% in the last week. But that doesn't change the fact that the returns over the last three years have been spectacular. Indeed, the share price is up a whopping 671% in that time. So the recent fall doesn't do much to dampen our respect for the business. Only time will tell if there is still too much optimism currently reflected in the share price.
Anyone who held for that rewarding ride would probably be keen to talk about it.
View our latest analysis for Ocado Group
Ocado Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Ocado Group's revenue trended up 11% each year over three years. That's pretty nice growth. Some shareholders might think that the share price rise of 98% per year is a lucky result, considering the level of revenue growth. After a price rise like that many will have the business, and plenty of them will be wondering whether the price moved too high, too fast.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Ocado Group is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
It's nice to see that Ocado Group shareholders have received a total shareholder return of 80% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 48% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Case in point: We've spotted 2 warning signs for Ocado Group you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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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