Is Team17 Group's (LON:TM17) 126% Share Price Increase Well Justified?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Team17 Group PLC (LON:TM17) share price had more than doubled in just one year - up 126%. Also pleasing for shareholders was the 13% gain in the last three months. But this could be related to the strong market, which is up 12% in the last three months. We'll need to follow Team17 Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

View our latest analysis for Team17 Group

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...' 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.

Team17 Group was able to grow EPS by 15% in the last twelve months. The share price gain of 126% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 55.67.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Team17 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

Team17 Group shareholders should be happy with the total gain of 126% over the last twelve months. That's better than the more recent three month gain of 13%, implying that share price has plateaued recently. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). If you would like to research Team17 Group in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

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 GB exchanges.

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This article by Simply Wall St is general in nature. 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.
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