Zespól Elektrocieplowni Wroclawskich KOGENERACJA (WSE:KGN) jumps 11% this week, though earnings growth is still tracking behind five-year shareholder returns

Zespól Elektrocieplowni Wroclawskich KOGENERACJA S.A. (WSE:KGN) shareholders might be concerned after seeing the share price drop 19% in the last quarter. On the other hand the returns over the last half decade have not been bad. It's good to see the share price is up 63% in that time, better than its market return of 58%.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for Zespól Elektrocieplowni Wroclawskich KOGENERACJA

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Over half a decade, Zespól Elektrocieplowni Wroclawskich KOGENERACJA managed to grow its earnings per share at 46% a year. The EPS growth is more impressive than the yearly share price gain of 10% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. The reasonably low P/E ratio of 2.76 also suggests market apprehension.

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

We know that Zespól Elektrocieplowni Wroclawskich KOGENERACJA 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 nice to see that Zespól Elektrocieplowni Wroclawskich KOGENERACJA shareholders have received a total shareholder return of 62% over the last year. That gain is better than the annual TSR over five years, which is 11%. 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

Of course Zespól Elektrocieplowni Wroclawskich KOGENERACJA may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.