Earnings Growth Over Year At tinyBuild Not Translating Into Positive Shareholder Returns

Even the best stock pickers will make plenty of bad investments. Unfortunately, shareholders of tinyBuild, Inc. (LON:TBLD) have suffered share price declines over the last year. The share price is down a hefty 59% in that time. We wouldn't rush to judgement on tinyBuild because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 28% in the last three months.

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

Check out our latest analysis for tinyBuild

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

Even though the tinyBuild share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past.

The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.

tinyBuild managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

It is of course excellent to see how tinyBuild has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling tinyBuild stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We doubt tinyBuild shareholders are happy with the loss of 59% over twelve months. That falls short of the market, which lost 1.4%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 28% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with tinyBuild .

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 GB 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.