Even after rising 23% this past week, CVC Brasil Operadora e Agência de Viagens (BVMF:CVCB3) shareholders are still down 89% over the past five years

CVC Brasil Operadora e Agência de Viagens S.A. (BVMF:CVCB3) shareholders should be happy to see the share price up 23% in the last week. But will that heal all the wounds inflicted over 5 years of declines? Unlikely. Five years have seen the share price descend precipitously, down a full 91%. So we don't gain too much confidence from the recent recovery. The important question is if the business itself justifies a higher share price in the long term. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

The recent uptick of 23% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for CVC Brasil Operadora e Agência de Viagens

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Over five years CVC Brasil Operadora e Agência de Viagens' earnings per share dropped significantly, falling to a loss, with the share price also lower. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But we would generally expect a lower price, given the situation.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It is of course excellent to see how CVC Brasil Operadora e Agência de Viagens has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at CVC Brasil Operadora e Agência de Viagens' financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that CVC Brasil Operadora e Agência de Viagens shareholders are down 62% for the year. Unfortunately, that's worse than the broader market decline of 5.0%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 14% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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 2 warning signs for CVC Brasil Operadora e Agência de Viagens you should be aware of, and 1 of them doesn't sit too well with us.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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