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Sensata Technologies Holding (NYSE:ST) Shareholders Have Enjoyed A 64% Share Price Gain

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When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. But Sensata Technologies Holding plc (NYSE:ST) has fallen short of that second goal, with a share price rise of 64% over five years, which is below the market return. Some buyers are laughing, though, with an increase of 52% in the last year.

See our latest analysis for Sensata Technologies Holding

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Sensata Technologies Holding's earnings per share are down 9.5% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Because earnings per share don't seem to match up with the share price, we'll take a look at other metrics instead.

We are not particularly impressed by the annual compound revenue growth of 0.5% over five years. So why is the share price up? It's not immediately obvious to us, but a closer look at the company's progress over time might yield answers.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

Sensata Technologies Holding is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Sensata Technologies Holding in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Sensata Technologies Holding shareholders have received a total shareholder return of 52% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Sensata Technologies Holding better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Sensata Technologies Holding (of which 1 is concerning!) you should know about.

Of course Sensata Technologies Holding 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.

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.

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