SBI Cards and Payment Services Limited (NSE:SBICARD) shareholders have seen the share price descend 12% over the month. But that fact in itself shouldn't obscure what are quite decent returns over the last year. We say this because the stock (which is up 78%) actually surpassed the market return of (71%).
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...' 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, SBI Cards and Payment Services actually saw its earnings per share drop 37%.
So we don't think that investors are paying too much attention to EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.
We are skeptical of the suggestion that the 0.1% dividend yield would entice buyers to the stock. We think that the revenue growth of 5.2% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
SBI Cards and Payment Services is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
SBI Cards and Payment Services shareholders have gained 78% over twelve months (even including dividends), which isn't far from the market return of 71%. Unfortunately the share price is down 6.5% over the last quarter. It may simply be that the share price got ahead of itself, although you might want to check for any weak results. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for SBI Cards and Payment Services (of which 1 doesn't sit too well with us!) you should know about.
We will like SBI Cards and Payment Services 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 IN 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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