Elevate Credit's (NYSE:ELVT) Stock Price Has Reduced 35% In The Past Three Years

It is a pleasure to report that the Elevate Credit, Inc. (NYSE:ELVT) is up 82% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. Truth be told the share price declined 35% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

View our latest analysis for Elevate Credit

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

Although the share price is down over three years, Elevate Credit actually managed to grow EPS by 234% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

With revenue flat over three years, it seems unlikely that the share price is reflecting the top line. We're not entirely sure why the share price is dropped, but it does seem likely investors have become less optimistic about the business.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

It is of course excellent to see how Elevate Credit has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Over the last year Elevate Credit shareholders have received a TSR of 3.3%. Unfortunately this falls short of the market return of around 27%. The silver lining is that the recent rise is far preferable to the annual loss of 10% that shareholders have suffered over the last three years. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand Elevate Credit better, we need to consider many other factors. Even so, be aware that Elevate Credit is showing 3 warning signs in our investment analysis , and 2 of those are significant...

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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