Stock Analysis

ABO-Group Environment's (EBR:ABO) five-year earnings growth trails the 20% YoY shareholder returns

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ENXTBR:ABO
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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. Long term ABO-Group Environment NV (EBR:ABO) shareholders would be well aware of this, since the stock is up 150% in five years. In the last week the share price is up 13%.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for ABO-Group Environment

There is no denying that markets are sometimes efficient, but prices do not always reflect 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 five years of share price growth, ABO-Group Environment achieved compound earnings per share (EPS) growth of 21% per year. This EPS growth is remarkably close to the 20% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Indeed, it would appear the share price is reacting to the EPS.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
ENXTBR:ABO Earnings Per Share Growth November 28th 2023

Dive deeper into ABO-Group Environment's key metrics by checking this interactive graph of ABO-Group Environment's earnings, revenue and cash flow.

A Different Perspective

It's good to see that ABO-Group Environment has rewarded shareholders with a total shareholder return of 20% in the last twelve months. That gain is better than the annual TSR over five years, which is 20%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand ABO-Group Environment better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with ABO-Group Environment , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

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