Eidesvik Offshore (OB:EIOF) delivers shareholders splendid 57% CAGR over 3 years, surging 12% in the last week alone

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For example, the Eidesvik Offshore ASA (OB:EIOF) share price has soared 289% in the last three years. How nice for those who held the stock! It's also up 19% in about a month.

Since the stock has added kr121m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Eidesvik Offshore

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).

During three years of share price growth, Eidesvik Offshore moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

Dive deeper into Eidesvik Offshore's key metrics by checking this interactive graph of Eidesvik Offshore's earnings, revenue and cash flow.

A Different Perspective

Eidesvik Offshore shareholders are up 8.1% for the year. But that return falls short of the market. On the bright side, the longer term returns (running at about 20% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Eidesvik Offshore better, we need to consider many other factors. For example, we've discovered 1 warning sign for Eidesvik Offshore that you should be aware of before investing here.

But note: Eidesvik Offshore may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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