Despite lower earnings than a year ago, Gulf Marine Services (LON:GMS) investors are up 247% since then

The Gulf Marine Services PLC (LON:GMS) share price has had a bad week, falling 12%. But that doesn't detract from the splendid returns of the last year. During that period, the share price soared a full 247%. So some might not be surprised to see the price retrace some. The real question is whether the business is trending in the right direction.

Since the long term performance has been good but there's been a recent pullback of 12%, let's check if the fundamentals match the share price.

See our latest analysis for Gulf Marine Services

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the last year, Gulf Marine Services actually saw its earnings per share drop 51%.

So we don't think that investors are paying too much attention to 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.

However the year on year revenue growth of 8.4% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

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

It is of course excellent to see how Gulf Marine Services has grown profits over the years, but the future is more important for shareholders. This free interactive report on Gulf Marine Services' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Gulf Marine Services shareholders have received a total shareholder return of 247% over the last year. That certainly beats the loss of about 3% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Gulf Marine Services you should be aware of, and 1 of them doesn't sit too well with us.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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