Despite shrinking by AU$31m in the past week, Plenti Group (ASX:PLT) shareholders are still up 178% over 3 years

Plenti Group Limited (ASX:PLT) shareholders might be concerned after seeing the share price drop 11% in the last week. But that doesn't change the fact that the returns over the last three years have been very strong. In fact, the share price is up a full 178% compared to three years ago. To some, the recent share price pullback wouldn't be surprising after such a good run. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.

While the stock has fallen 11% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During three years of share price growth, Plenti Group moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

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

We know that Plenti Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Plenti Group will grow revenue in the future.

A Different Perspective

We're pleased to report that Plenti Group shareholders have received a total shareholder return of 101% over one year. That gain is better than the annual TSR over five years, which is 3%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Plenti Group better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Plenti Group .

Of course Plenti Group 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 Australian 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.