The Elevate Credit (NYSE:ELVT) Share Price Has Gained 135%, So Why Not Pay It Some Attention?

By
Simply Wall St
Published
July 01, 2021
NYSE:ELVT
Source: Shutterstock

Elevate Credit, Inc. (NYSE:ELVT) shareholders might be concerned after seeing the share price drop 10% in the last week. But that doesn't change the fact that the returns over the last year have been very strong. We're very pleased to report the share price shot up 135% in that time. So it is important to view the recent reduction in price through that lense. More important, going forward, is how the business itself is going.

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 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.

Elevate Credit was able to grow EPS by 97% in the last twelve months. The share price gain of 135% certainly outpaced the EPS growth. So it's fair to assume the market has a higher opinion of the business than it a year ago.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
NYSE:ELVT Earnings Per Share Growth July 1st 2021

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

A Different Perspective

Pleasingly, Elevate Credit's total shareholder return last year was 135%. This recent result is much better than the 18% drop suffered by shareholders each year (on average) over the last three. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Elevate Credit (at least 2 which are significant) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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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. 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.
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