Quarto Group's (LON:QRT) investors will be pleased with their solid 201% return over the last three years
It might be of some concern to shareholders to see the The Quarto Group, Inc. (LON:QRT) share price down 15% in the last month. In contrast, the return over three years has been impressive. Indeed, the share price is up a very strong 201% in that time. After a run like that some may not be surprised to see prices moderate. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
See our latest analysis for Quarto Group
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Quarto Group was able to grow its EPS at 27% per year over three years, sending the share price higher. This EPS growth is lower than the 44% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It's not unusual to see the market 're-rate' a stock, after a few years of growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Quarto Group's key metrics by checking this interactive graph of Quarto Group's earnings, revenue and cash flow.
A Different Perspective
It's good to see that Quarto Group has rewarded shareholders with a total shareholder return of 17% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 0.4% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Quarto Group better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Quarto Group .
Of course Quarto Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British 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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