PUMA (ETR:PUM) stock falls 3.9% in past week as three-year earnings and shareholder returns continue downward trend

If you love investing in stocks you're bound to buy some losers. But the long term shareholders of PUMA SE (ETR:PUM) have had an unfortunate run in the last three years. So they might be feeling emotional about the 62% share price collapse, in that time. And more recent buyers are having a tough time too, with a drop of 31% in the last year. Shareholders have had an even rougher run lately, with the share price down 13% in the last 90 days.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for PUMA

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.

PUMA saw its EPS decline at a compound rate of 3.9% per year, over the last three years. The share price decline of 28% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past.

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

It might be well worthwhile taking a look at our free report on PUMA's earnings, revenue and cash flow.

A Different Perspective

Investors in PUMA had a tough year, with a total loss of 30% (including dividends), against a market gain of about 16%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% 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. It's always interesting to track share price performance over the longer term. But to understand PUMA better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for PUMA you should know about.

Of course PUMA 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 German 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.