Lemon Tree Hotels (NSE:LEMONTREE) delivers shareholders stellar 49% CAGR over 3 years, surging 4.9% in the last week alone

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For instance the Lemon Tree Hotels Limited (NSE:LEMONTREE) share price is 233% higher than it was three years ago. Most would be happy with that. It's also good to see the share price up 35% over the last quarter.

Since it's been a strong week for Lemon Tree Hotels shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Lemon Tree Hotels

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During three years of share price growth, Lemon Tree Hotels moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

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

We know that Lemon Tree Hotels has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Lemon Tree Hotels' financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Lemon Tree Hotels has rewarded shareholders with a total shareholder return of 23% in the last twelve months. That gain is better than the annual TSR over five years, which is 22%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Lemon Tree Hotels , and understanding them should be part of your investment process.

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 Indian 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.