U.S. markets closed
  • S&P Futures

    3,728.75
    -3.25 (-0.09%)
     
  • Dow Futures

    29,727.00
    -23.00 (-0.08%)
     
  • Nasdaq Futures

    11,536.75
    -19.00 (-0.16%)
     
  • Russell 2000 Futures

    1,720.30
    -0.50 (-0.03%)
     
  • Crude Oil

    82.37
    +0.22 (+0.27%)
     
  • Gold

    1,667.10
    -2.90 (-0.17%)
     
  • Silver

    18.88
    -0.00 (-0.03%)
     
  • EUR/USD

    0.9689
    -0.0050 (-0.51%)
     
  • 10-Yr Bond

    3.7050
    -0.2590 (-6.53%)
     
  • Vix

    30.18
    -2.42 (-7.42%)
     
  • GBP/USD

    1.0802
    -0.0083 (-0.77%)
     
  • USD/JPY

    144.3570
    +0.2350 (+0.16%)
     
  • BTC-USD

    19,567.42
    +566.71 (+2.98%)
     
  • CMC Crypto 200

    447.40
    +18.62 (+4.34%)
     
  • FTSE 100

    7,005.39
    +20.80 (+0.30%)
     
  • Nikkei 225

    26,364.47
    +190.49 (+0.73%)
     

QuinStreet's (NASDAQ:QNST) investors will be pleased with their solid 237% return over the last five years

·2 min read

It certainly might concern QuinStreet, Inc. (NASDAQ:QNST) shareholders to see the share price down 32% in just 30 days. But that scarcely detracts from the really solid long term returns generated by the company over five years. It's fair to say most would be happy with 237% the gain in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. The more important question is whether the stock is too cheap or too expensive today. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 54% drop, in the last year.

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.

View our latest analysis for QuinStreet

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 the five years of share price growth, QuinStreet moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
earnings-per-share-growth

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market lost about 1.4% in the twelve months, QuinStreet shareholders did even worse, losing 54%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 28% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for QuinStreet you should be aware of.

Of course QuinStreet 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 US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.