The five-year loss for Vext Science (CSE:VEXT) shareholders likely driven by its shrinking earnings

Vext Science, Inc. (CSE:VEXT) shareholders will doubtless be very grateful to see the share price up 35% in the last week. But will that repair the damage for the weary investors who have owned this stock as it declined over half a decade? Probably not. Five years have seen the share price descend precipitously, down a full 77%. While the recent increase might be a green shoot, we're certainly hesitant to rejoice. The million dollar question is whether the company can justify a long term recovery.

The recent uptick of 35% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Vext Science

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Looking back five years, both Vext Science's share price and EPS declined; the latter at a rate of 19% per year. This reduction in EPS is less than the 25% annual reduction in the share price. This implies that the market was previously too optimistic about the stock. The low P/E ratio of 11.52 further reflects this reticence.

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

We know that Vext Science has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's good to see that Vext Science has rewarded shareholders with a total shareholder return of 12% in the last twelve months. That certainly beats the loss of about 12% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Even so, be aware that Vext Science is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...

Of course Vext Science 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 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.