CTS Eventim KGaA (ETR:EVD) shareholders have earned a 15% CAGR over the last five years

By
Simply Wall St
Published
September 12, 2021
XTRA:EVD
Source: Shutterstock

When we invest, we're generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term CTS Eventim AG & Co. KGaA (ETR:EVD) shareholders have enjoyed a 89% share price rise over the last half decade, well in excess of the market return of around 37% (not including dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 36%.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for CTS Eventim KGaA

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...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

CTS Eventim KGaA's earnings per share are down 28% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

The revenue reduction of 8.5% per year is not a positive. So it seems one might have to take closer look at earnings and revenue trends to see how they might influence the share price.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
XTRA:EVD Earnings and Revenue Growth September 12th 2021

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between CTS Eventim KGaA's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. CTS Eventim KGaA's TSR of 100% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

It's nice to see that CTS Eventim KGaA shareholders have received a total shareholder return of 36% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 15% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

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