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Shareholders Are Thrilled That The Qorvo (NASDAQ:QRVO) Share Price Increased 249%

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Simply Wall St
·2 min read
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When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of Qorvo, Inc. (NASDAQ:QRVO) stock is up an impressive 249% over the last five years. It's down 2.3% in the last seven days.

Check out our latest analysis for Qorvo

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 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).

Over half a decade, Qorvo managed to grow its earnings per share at 220% a year. This EPS growth is higher than the 28% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

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

We know that Qorvo has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Qorvo's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Qorvo has rewarded shareholders with a total shareholder return of 124% in the last twelve months. That's better than the annualised return of 28% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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 1 warning sign for Qorvo you should be aware of.

Of course Qorvo 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.