Optimism around Haemonetics (NYSE:HAE) delivering new earnings growth may be shrinking as stock declines 5.8% this past week

By
Simply Wall St
Published
February 18, 2022
NYSE:HAE
Source: Shutterstock

Even the best stock pickers will make plenty of bad investments. Anyone who held Haemonetics Corporation (NYSE:HAE) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 59%. We note that it has not been easy for shareholders over three years, either; the share price is down 38% in that time. And the share price decline continued over the last week, dropping some 5.8%. But this could be related to the soft market, which is down about 2.9% in the same period.

With the stock having lost 5.8% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for Haemonetics

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Unfortunately Haemonetics reported an EPS drop of 79% for the last year. The share price fall of 59% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared. With a P/E ratio of 123.57, it's fair to say the market sees an EPS rebound on the cards.

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

earnings-per-share-growth
NYSE:HAE Earnings Per Share Growth February 18th 2022

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

Investors in Haemonetics had a tough year, with a total loss of 59%, against a market gain of about 2.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 8% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. To that end, you should learn about the 3 warning signs we've spotted with Haemonetics (including 1 which makes us a bit uncomfortable) .

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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