Is Syneos Health's (NASDAQ:SYNH) Share Price Gain Of 135% Well Earned?

By
Simply Wall St
Published
June 28, 2021
NasdaqGS:SYNH
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When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of Syneos Health, Inc. (NASDAQ:SYNH) stock is up an impressive 135% over the last five years. Also pleasing for shareholders was the 16% gain in the last three months. But this could be related to the strong market, which is up 8.1% in the last three months.

Check out our latest analysis for Syneos Health

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 half decade, Syneos Health became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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

earnings-per-share-growth
NasdaqGS:SYNH Earnings Per Share Growth June 28th 2021

It is of course excellent to see how Syneos Health has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Syneos Health stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Syneos Health has rewarded shareholders with a total shareholder return of 59% in the last twelve months. That gain is better than the annual TSR over five years, which is 19%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 2 warning signs for Syneos Health you should know about.

We will like Syneos Health 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 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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.