The 328% return delivered to System1 Group's (LON:SYS1) shareholders actually lagged YoY earnings growth

For many, the main point of investing in the stock market is to achieve spectacular returns. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. In the case of System1 Group PLC (LON:SYS1), the share price is up an incredible 328% in the last year alone. Also pleasing for shareholders was the 67% gain in the last three months. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. And shareholders have also done well over the long term, with an increase of 219% in the last three years.

The past week has proven to be lucrative for System1 Group investors, so let's see if fundamentals drove the company's one-year performance.

See our latest analysis for System1 Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year System1 Group saw its earnings per share (EPS) increase strongly. This remarkable growth rate may not be sustainable, but it is still impressive. So we'd expect to see the share price higher. To us, inflection points like this are the best time to take a close look at a 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 System1 Group has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

It's good to see that System1 Group has rewarded shareholders with a total shareholder return of 328% in the last twelve months. That's better than the annualised return of 25% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Take risks, for example - System1 Group has 1 warning sign we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com