Stock Analysis

Recent 8.8% pullback isn't enough to hurt long-term Adient (NYSE:ADNT) shareholders, they're still up 514% over 3 years

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Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. One bright shining star stock has been Adient plc (NYSE:ADNT), which is 514% higher than three years ago. It's also good to see the share price up 14% over the last quarter. Anyone who held for that rewarding ride would probably be keen to talk about it.

In light of the stock dropping 8.8% 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.

See our latest analysis for Adient

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

Adient became profitable within the last three years. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

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

NYSE:ADNT Earnings Per Share Growth March 15th 2023

It is of course excellent to see how Adient has grown profits over the years, but the future is more important for shareholders. This free interactive report on Adient's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Adient shareholders have received a total shareholder return of 6.0% over the last year. Notably the five-year annualised TSR loss of 6% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Before spending more time on Adient it might be wise to click here to see if insiders have been buying or selling shares.

But note: Adient 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 American exchanges.

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