U.S. markets open in 6 hours 50 minutes
  • S&P Futures

    3,800.25
    +9.75 (+0.26%)
     
  • Dow Futures

    30,846.00
    +18.00 (+0.06%)
     
  • Nasdaq Futures

    13,066.50
    +81.00 (+0.62%)
     
  • Russell 2000 Futures

    2,142.50
    -4.80 (-0.22%)
     
  • Crude Oil

    53.45
    +0.47 (+0.89%)
     
  • Gold

    1,854.10
    +13.90 (+0.76%)
     
  • Silver

    25.58
    +0.26 (+1.01%)
     
  • EUR/USD

    1.2160
    +0.0027 (+0.22%)
     
  • 10-Yr Bond

    1.0920
    0.0000 (0.00%)
     
  • Vix

    23.24
    -1.10 (-4.52%)
     
  • GBP/USD

    1.3664
    +0.0029 (+0.22%)
     
  • USD/JPY

    103.7300
    -0.1620 (-0.16%)
     
  • BTC-USD

    35,713.27
    -180.98 (-0.50%)
     
  • CMC Crypto 200

    708.81
    -6.39 (-0.89%)
     
  • FTSE 100

    6,712.95
    -7.70 (-0.11%)
     
  • Nikkei 225

    28,523.26
    -110.20 (-0.38%)
     

Should SVB Financial Group (NASDAQ:SIVB) Be Disappointed With Their 36% Profit?

Simply Wall St
·3 min read

Some SVB Financial Group (NASDAQ:SIVB) shareholders are probably rather concerned to see the share price fall 31% over the last three months. But the silver lining is the stock is up over five years. In that time, it is up 36%, which isn't bad, but is below the market return of 37%.

View our latest analysis for SVB Financial Group

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 five years of share price growth, SVB Financial Group achieved compound earnings per share (EPS) growth of 32% per year. The EPS growth is more impressive than the yearly share price gain of 6.4% over the same period. So one could conclude that the broader market has become more cautious towards the stock. The reasonably low P/E ratio of 7.83 also suggests market apprehension.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

NasdaqGS:SIVB Past and Future Earnings March 27th 2020
NasdaqGS:SIVB Past and Future Earnings March 27th 2020

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on SVB Financial Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that SVB Financial Group shareholders are down 23% for the year. Unfortunately, that's worse than the broader market decline of 7.2%. 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 6.4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for SVB Financial Group (of which 1 is a bit unpleasant!) you should know about.

SVB Financial Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.