Did Changing Sentiment Drive ATA's Share Price Down A Painful 79%?

It's understandable if you feel frustrated when a stock you own sees a lower share price. But sometimes broader market conditions have more of an impact on prices than the actual business performance. The ATA Inc. (NASDAQ:ATAI) is down 79% over a year, but the total shareholder return is 92% once you include the dividend. And that total return actually beats the market return of 6.0%. To make matters worse, the returns over three years have also been really disappointing (the share price is 76% lower than three years ago). The good news is that the stock is up 4.6% in the last week.

Check out our latest analysis for ATA

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).

ATA managed to increase earnings per share from a loss to a profit, over the last 12 months. The result looks like a strong improvement to us, so we're surprised the market has sold down the shares. If the improved profitability is a sign of things to come, then right now may prove the perfect time to pop this stock on your watchlist.

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

It might be well worthwhile taking a look at our freereport on ATA's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between ATA'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. Its history of dividend payouts mean that ATA's TSR of 92% over the last year is better than the share price return.

A Different Perspective

We're pleased to report that ATA shareholders have received a total shareholder return of 92% over one year. That gain is better than the annual TSR over five years, which is 24%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you like to buy stocks alongside management, then you might just love this freelist of companies. (Hint: insiders have been buying them).

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.