Is Tasty Bite Eatables' (NSE:TASTYBITE) Share Price Gain Of 129% Well Earned?

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But when you pick a company that is really flourishing, you can make more than 100%. For instance the Tasty Bite Eatables Limited (NSE:TASTYBITE) share price is 129% higher than it was three years ago. Most would be happy with that. It's also good to see the share price up 33% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 26% in 90 days).

Check out our latest analysis for Tasty Bite Eatables

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, Tasty Bite Eatables achieved compound earnings per share growth of 17% per year. This EPS growth is lower than the 32% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. That's not necessarily surprising considering the three-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 94.35.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Tasty Bite Eatables' key metrics by checking this interactive graph of Tasty Bite Eatables's earnings, revenue and cash flow.

A Different Perspective

Pleasingly, Tasty Bite Eatables' total shareholder return last year was 49%. That includes the value of the dividend. That gain actually surpasses the 32% TSR it generated (per year) over three years. The improving returns to shareholders suggests the stock is becoming more popular with time. 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. Case in point: We've spotted 1 warning sign for Tasty Bite Eatables you should be aware of.

We will like Tasty Bite Eatables 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 IN exchanges.

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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.
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