Shareholders 11% loss in Boa Safra Sementes (BVMF:SOJA3) partly attributable to the company's decline in earnings over past year

While it may not be enough for some shareholders, we think it is good to see the Boa Safra Sementes S.A. (BVMF:SOJA3) share price up 20% in a single quarter. It's not great that the stock is down over the last year. But at least it bettered the loss of 18% in its market.

While the stock has risen 11% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Boa Safra Sementes

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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unhappily, Boa Safra Sementes had to report a 46% decline in EPS over the last year. This fall in the EPS is significantly worse than the 12% the share price fall. It may have been that the weak EPS was not as bad as some had feared.

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 Boa Safra Sementes has grown profits over the years, but the future is more important for shareholders. This free interactive report on Boa Safra Sementes' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the broader market dropped 18% over the year, the fact that Boa Safra Sementes shareholders were down 11% isn't so bad. At least the recent returns have been positive, with the stock up 20% in around 90 days. It could be that the share price dropped so far that the business was cheap on the numbers, but the future will ultimately determine the value of the stock. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Boa Safra Sementes you should know about.

Of course Boa Safra Sementes 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 Brazilian 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.