Network International Holdings (LON:NETW) Share Prices Have Dropped 26% In The Last Year

The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the Network International Holdings plc (LON:NETW) share price is down 26% in the last year. That's disappointing when you consider the market declined 12%. We wouldn't rush to judgement on Network International Holdings because we don't have a long term history to look at. More recently, the share price has dropped a further 8.3% in a month. However, we note the price may have been impacted by the broader market, which is down 4.0% in the same time period.

View our latest analysis for Network International Holdings

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).

During the unfortunate twelve months during which the Network International Holdings share price fell, it actually saw its earnings per share (EPS) improve by 20%. Of course, the situation might betray previous over-optimism about growth.

It's surprising to see the share price fall so much, despite the improved EPS. So it's well worth checking out some other metrics, too.

Given the yield is quite low, at 0.6%, we doubt the dividend can shed much light on the share price. Network International Holdings's revenue is actually up 12% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We know that Network International Holdings has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Network International Holdings will earn in the future (free profit forecasts).

A Different Perspective

Network International Holdings shareholders are down 26% for the year (even including dividends) , even worse than the market loss of 12%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 1.1%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. For example, we've discovered 2 warning signs for Network International Holdings that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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