The three-year loss for Cyfrowy Polsat (WSE:CPS) shareholders likely driven by its shrinking earnings

Investing in stocks inevitably means buying into some companies that perform poorly. But long term Cyfrowy Polsat S.A. (WSE:CPS) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 63% decline in the share price in that time.

The recent uptick of 3.9% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Cyfrowy Polsat

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 three years that the share price fell, Cyfrowy Polsat's earnings per share (EPS) dropped by 34% each year. This fall in EPS isn't far from the rate of share price decline, which was 28% per year. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. In this case, it seems that the EPS is guiding the share price.

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

It might be well worthwhile taking a look at our free report on Cyfrowy Polsat's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Cyfrowy Polsat's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Cyfrowy Polsat shareholders, and that cash payout explains why its total shareholder loss of 59%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

Investors in Cyfrowy Polsat had a tough year, with a total loss of 13%, against a market gain of about 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with Cyfrowy Polsat (including 1 which doesn't sit too well with us) .

But note: Cyfrowy Polsat 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 Polish 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.