Should Scholar Education Group (HKG:1769) Be Disappointed With Their 26% Profit?

The last three months have been tough on Scholar Education Group (HKG:1769) shareholders, who have seen the share price decline a rather worrying 38%. But that doesn't change the fact that the returns over the last year have been pleasing. After all, the share price is up a market-beating 26% in that time.

View our latest analysis for Scholar Education Group

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

Scholar Education Group was able to grow EPS by 22% in the last twelve months. We note that the earnings per share growth isn't far from the share price growth (of 26%). So this implies that investor expectations of the company have remained pretty steady. It makes intuitive sense that the share price and EPS would grow at similar rates.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Scholar Education Group's earnings, revenue and cash flow.

A Different Perspective

Scholar Education Group shareholders should be happy with the total gain of 27% over the last twelve months, including dividends. We regret to report that the share price is down 38% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It's always interesting to track share price performance over the longer term. But to understand Scholar Education Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for Scholar Education Group that you should be aware of before investing here.

We will like Scholar Education Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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