Arrow Exploration (CVE:AXL) pulls back 15% this week, but still delivers shareholders massive 69% CAGR over 3 years

It's been a soft week for Arrow Exploration Corp. (CVE:AXL) shares, which are down 15%. But that doesn't displace its brilliant performance over three years. The longer term view reveals that the share price is up 386% in that period. Arguably, the recent fall is to be expected after such a strong rise. The only way to form a view of whether the current price is justified is to consider the merits of the business itself.

Since the long term performance has been good but there's been a recent pullback of 15%, let's check if the fundamentals match the share price.

View our latest analysis for Arrow Exploration

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.

Arrow Exploration became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Arrow Exploration has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Arrow Exploration stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Arrow Exploration shareholders have received a total shareholder return of 67% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 19% per year), it would seem that the stock's performance has improved in recent times. 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 Arrow Exploration better, we need to consider many other factors. Even so, be aware that Arrow Exploration is showing 4 warning signs in our investment analysis , and 1 of those can't be ignored...

We will like Arrow Exploration better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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