Xueda (Xiamen) Education Technology Group's (SZSE:000526) earnings growth rate lags the 38% CAGR delivered to shareholders

It hasn't been the best quarter for Xueda (Xiamen) Education Technology Group Co., Ltd (SZSE:000526) shareholders, since the share price has fallen 20% in that time. In contrast, the return over three years has been impressive. Indeed, the share price is up a very strong 164% in that time. After a run like that some may not be surprised to see prices moderate. Only time will tell if there is still too much optimism currently reflected in the share price.

While the stock has fallen 7.4% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for Xueda (Xiamen) Education Technology Group

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Xueda (Xiamen) Education Technology Group was able to grow its EPS at 49% per year over three years, sending the share price higher. The average annual share price increase of 38% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Xueda (Xiamen) Education Technology Group has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Xueda (Xiamen) Education Technology Group has rewarded shareholders with a total shareholder return of 36% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 7% 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. Before forming an opinion on Xueda (Xiamen) Education Technology Group you might want to consider these 3 valuation metrics.

We will like Xueda (Xiamen) Education Technology Group 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 Chinese 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.