Even though Estoril Sol SGPS (ELI:ESON) has lost €9.5m market cap in last 7 days, shareholders are still up 34% over 3 years

It might be of some concern to shareholders to see the Estoril Sol, SGPS, S.A. (ELI:ESON) share price down 11% in the last month. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 34%: better than the market.

In light of the stock dropping 10% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

View our latest analysis for Estoril Sol SGPS

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

Estoril Sol SGPS became profitable within the last three years. That would generally be considered a positive, so we'd expect the share price to be up.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

It's nice to see that Estoril Sol SGPS shareholders have received a total shareholder return of 16% over the last year. Notably the five-year annualised TSR loss of 3% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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 4 warning signs we've spotted with Estoril Sol SGPS (including 1 which is a bit unpleasant) .

But note: Estoril Sol SGPS 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 Portuguese 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.