Stock Analysis

FLEETCOR Technologies' (NYSE:FLT) one-year earnings growth trails the decent shareholder returns

NYSE:CPAY
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The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. For example, the FLEETCOR Technologies, Inc. (NYSE:FLT) share price is up 53% in the last 1 year, clearly besting the market return of around 19% (not including dividends). So that should have shareholders smiling. However, the longer term returns haven't been so impressive, with the stock up just 5.1% in the last three years.

Since the stock has added US$864m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for FLEETCOR Technologies

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 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.

During the last year FLEETCOR Technologies grew its earnings per share (EPS) by 5.9%. This EPS growth is significantly lower than the 53% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
NYSE:FLT Earnings Per Share Growth October 11th 2023

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on FLEETCOR Technologies' earnings, revenue and cash flow.

A Different Perspective

It's nice to see that FLEETCOR Technologies shareholders have received a total shareholder return of 53% over the last year. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 risks, for instance. Every company has them, and we've spotted 1 warning sign for FLEETCOR Technologies you should know about.

We will like FLEETCOR Technologies better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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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.