eClerx Services' (NSE:ECLERX) one-year earnings growth trails the 191% YoY shareholder returns

Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the eClerx Services Limited (NSE:ECLERX) share price has soared 190% return in just a single year. And in the last month, the share price has gained 31%. Also impressive, the stock is up 166% over three years, making long term shareholders happy, too.

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

View our latest analysis for eClerx Services

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 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).

During the last year eClerx Services grew its earnings per share (EPS) by 59%. This EPS growth is significantly lower than the 190% increase in the share price. This indicates that the market is now more optimistic about the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that eClerx Services 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

It's good to see that eClerx Services has rewarded shareholders with a total shareholder return of 191% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 15%. 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. It's always interesting to track share price performance over the longer term. But to understand eClerx Services better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with eClerx Services .

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 IN 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.