ZIM Integrated Shipping Services (NYSE:ZIM) advances 4.2% this week, taking three-year gains to 11%
It is a pleasure to report that the ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is up 57% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. Truth be told the share price declined 55% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.
While the stock has risen 4.2% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
Check out our latest analysis for ZIM Integrated Shipping Services
ZIM Integrated Shipping Services wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over three years, ZIM Integrated Shipping Services grew revenue at 22% per year. That is faster than most pre-profit companies. The share price has moved in quite the opposite direction, down 16% over that time, a bad result. This could mean hype has come out of the stock because the losses are concerning investors. When we see revenue growth, paired with a falling share price, we can't help wonder if there is an opportunity for those who are willing to dig deeper.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
What About The Total Shareholder Return (TSR)?
We've already covered ZIM Integrated Shipping Services' share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that ZIM Integrated Shipping Services' TSR of 11% over the last 3 years is better than the share price return.
A Different Perspective
ZIM Integrated Shipping Services shareholders are down 25% for the year, but the broader market is up 33%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 4% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. 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. Even so, be aware that ZIM Integrated Shipping Services is showing 1 warning sign in our investment analysis , you should know about...
We will like ZIM Integrated Shipping Services better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
